By: Joe Flynn, P2PConnect
Statement Auditing is a top best practice.
Nowadays, large enterprises have to deal with millions of financial transactions and thousands of vendors on a yearly basis. At the same, both the business environment and structure change at unparalleled speed. You have to keep track of countless mergers, consolidations, acquisitions, centralizations, and new system improvements. No wonder achieving the 100% payment accuracy and efficiency seems more like a frustrating science fiction scenario than an essential and clear business requirement. Unfortunately, we’ve only scratched the surface of more serious and complex problems.
Identifying Problems – Applying Solutions
The inevitable complex character of modern purchasing environments, combined with the overwhelming transaction volumes and ever-changing price structures can only lead to one or more of the following:
- Expensive accounting errors
- Lost and problematic discounts
- Improper, late and inadequate pricing
Even if you manage to achieve the “optimal” 99.9% payment accuracy, when you apply it to the major business league field where billions of dollars are being spent yearly, you’ll end up with millions of dollars waiting to be recovered. As you go deeper into the heart of the financial sea of problems, you realize that recovery dollars feel very comfortable hiding in the following areas:
- Problematic allowances, rebates, and pricing
- Pending contract compliances
- Pricing which includes purchases
- Products related to and included in the family
- Point of sale and purchase data in conjunction
- Questionable timing of promotions and deals
This list can go on and on because we have to include the unavoidable processing errors, multiple payments associated with a single invoice, vendor master data errors, and miss-applied credits. You’re walking through a minefield of financial troubles, where you can make so many wrong moves and only very few of the right ones.
Is There a Recovery Light for the inside of Your Business Tunnel?
Without any exaggeration, we can say that only fully automatized statement auditing allows you to identify all financial anomalies and recover substantial amounts, which seem lost. You need to run through the entire business field almost in a blink of an eye, to act adequately. Only statement auditing can make sure that your investigation process includes both your business’ AP data/processes and suppliers’ AR data/processes.
Albert Einstein defined insanity as an unreasonable repetition of the same thing, with an optimistic expectation of achieving different results. We still can’t tell for sure that this was his authentic famous quote, but we can describe a business suicide as a blind faith that your company’s dollars will recover miraculously by themselves. Without comprehensive statement auditing, you can only expect for your problematic transactions and other financial anomalies to multiply progressively and mercilessly based on the ever-growing number of your company’s suppliers and purchasing transactions.