Assume your merchandising-payables operations are paying all invoices with 99.9% accuracy. The remaining .1% can really add up with heavy sales volume. Nearly all companies with sales over $500m per year utilize accounts payable audits because they realize the value an experienced audit group brings to their organization. Audit Recovery leads the retail and wholesale industries in recovering lost dollars and helping our clients minimize losses going forward.

Audit Recovery employs the most innovative auditors and IT professionals to uncover lost profits for our clients. Our auditors thoughtfully piece together all electronic and paper data to gain a thorough understanding of each vendor’s practices. We combine sophisticated searching methods with the most thorough verification process to maximize recoveries and ensure the highest collection rates in the industry.

Many of our clients have asked this question before hiring Audit Recovery. When an A.P. clerk pays an invoice, that person is looking at only one transaction – in essence, a snapshot or partial story. Audit Recovery gathers all information for a 1-4 year timeframe and examines the full story. We compare paper & electronic receiving, payments, rebate, deal, merchandising and pricing information to view the full story and uncover overpayments that could not be detected otherwise.

As much as our clients attempt to streamline their operating procedures, it is impossible to streamline 100% of all transactions with every vendor. Our auditors and IT professionals are specifically trained to grasp the full story of all communications, data and payments for each vendor. When auditing each vendor, our goal is to understand all transactions in their entirety, and identify subtle overpayments that cannot be detected when analyzing a single transaction or a piece of the story.

Prior to the start of the audit, the Audit Manager meets with the client for about an hour to discuss current policies, preferences and to answer any questions. We efficiently conduct each audit, independently learning the accounting and procurement process as well as the IT systems. About two weeks into the audit, the Audit Manager schedules a second one-hour meeting. Issues such as debit types, claim formats and industry standards are addressed. This will eliminate any potential problems with debits prior to their submission.

Aside from cutting electronic data and the couple one-hour audit meetings, the level of involvement from our clients is entirely their choice. We tailor your involvement in the audit to your desire, and all of our new clients are impressed with our ability to independently acclimate ourselves with their systems, policies and procedures. Audit Recovery selects auditors and IT professionals with an innate ability to independently piece together information to learn the unique intricacies of each client.

As we uncover lost dollars, our existing clients continually refine their systems to avoid future losses.  At the same time, we are also refining our methods.  We search for new areas for recoveries due to changes in systems, procedures and personnel.  In addition, we continue to expand our audits to cover more areas of our clients’ operations.

One of our clients returned 3,500 cases of product that was purchased with an off-invoice allowance. The price was $24.00 less a $4.00 off-invoice allowance for a net price of $20.00. Since the product was purchased for a net price of $20.00, the return should have been calculated as $20.00 x 3,500 = $70,000.00. That is what our client deducted for the return. However, a few months later, the vendor sent correspondence stating that the returned product received a $4.00 allowance when it was purchased, and they requested a $14,000 repayment (3,500 x 4.00). Our client repaid $14,000, erroneously. The Audit Recovery auditor detected this overpayment, and produced a debit with all relevant backup information that made it easy for the vendor to understand and clear the $14,000 debit.

One other client ordered product that was to be demonstrated in their stores – frozen pizzas. The deal sheet offered a $3.00 off-invoice allowance for a demo in month of September, but the order was received in mid-October. The buyer placed a note on the purchase order stating that the buy was for the demonstration, the buy was ¾ truckload (over 30,000#), AND the pizza makers to perform the demo were listed on the vendor’s invoice. The allowance was not received off-invoice, and with all the evidence, it was clear that the 720 cases should have received the $3.00 allowance, totaling $2,160.00.

Another example pertains to an error regarding the delivery of merchandise. A client expected to receive product on April 30th, just before a price increase that was to take effect with shipments beginning on May 1st. The price was changing from $19.53 to $22.74. The order was for ? of a truckload or 3,500 cases. The vendor delayed shipment and it was not received until May 3rd. The vendor charged the $22.74 price and the clerk paid that price since that was the correct price as of May 1st. However, since our client requested the merchandise to be received before the price increase, our auditor produced a debit for the difference between $22.74 – 19.53 or 3.21 per unit. The 3.21 overcharge x 3,500 cases amounted to $11,235 that was overpaid.

Swapping UPC’s cost one of our clients $10,488.00. The vendor decided to change the UPC number of their 60-watt 4-packs of light bulbs. Before the UPC change, the vendor offered a 2.30 per case billback allowance for the old UPC number. Since the old UPC was loaded into our client’s system, a billback debit was never produced because they were buying the new UPC during the promotion timeframe. Our auditor verified that the light bulbs were exactly the same as the old UPC number, but the vendor decided to change the packaging. The 4,560 cases that were purchased during the promotion were due the $2.30 allowance, totaling $10,488.00.

Another client was due a volume growth incentive. The program requested that our client buy more electronic components from a vendor. If sales increased by $500k during the year, a 1% rebate applied. However, if sales increased by $1M during the year, a 2% rebate applied. The vendor calculated the increase in sales at $729,000 and issued credit for $7,290. Our auditor noticed that there were multiple vendor numbers and checked to see if other invoices for electronic components were paid to a different vendor number. When the auditor found $342,000 of electronic components payments under a different vendor number, it resulted in an underdeduction of $14,130 that was due to our client ($1.071M increase x 2% = $21,420 total due – $7,290 rec’d = $14,130 due).