Accounts Payable Recovery Review Checklist

1. Initial Preparation:

  • Obtain a full extract of your accounts payable data for the review period.
  • Secure access to relevant accounting software or ERP systems.
  • Collect copies of vendor contracts, terms, and conditions for reference.

2. Duplicate Payment Analysis:

  • Scan for duplicate invoice numbers for the same vendor.
  • Check for invoices paid on both purchase order (PO) and non-PO basis.
  • Identify payments with matching amounts to different vendors.
  • Review payments with similar invoice numbers, varying by one or two digits.

3. Overpayment Analysis:

  • Compare invoice amounts with contract terms to identify overpayments.
  • Check for payments made for canceled goods or services.
  • Validate if any credit notes or rebates from vendors were missed or not applied.
  • Analyze tax payments to ensure correct tax rates were applied.

4. Vendor Master File Review:

  • Look for duplicate vendor entries (e.g., slight variations in name or address).
  • Scan for inactive vendors with balances.
  • Validate vendor bank details, especially for foreign vendors.

5. Statement Reconciliation:

  • Reconcile vendor statements with AP records to ensure all credits are accounted for.
  • Communicate with vendors to clarify any discrepancies or obtain missing credit notes.

6. Unclaimed Property Due Diligence:

  • Identify any uncashed checks or unclaimed credits.
  • Follow statutory requirements for notifying vendors or beneficiaries of unclaimed funds.
  • Document efforts made to reunite unclaimed property with rightful owners.

7. Review of Terms and Discounts:

  • Ensure all early payment discounts are taken when applicable.
  • Validate that agreed-upon terms and conditions (e.g., volume discounts, rebates) are being applied.

8. Miscellaneous Checks:

  • Look for round-number payments that might indicate estimations or errors.
  • Review payments without proper supporting documentation.
  • Check for payments made outside the regular AP cycle.

9. Review and Update AP Controls:

  • Evaluate current AP procedures and controls.
  • Identify areas of weakness and recommend enhancements to prevent future errors.

10. Documentation:

  • Document all findings, including overpayments, duplicates, and discrepancies.
  • Communicate findings to relevant departments and vendors.
  • Secure approvals for any recoveries or adjustments.

11. Recovery Actions:

  • Initiate contact with vendors for repayment or apply credits to future invoices.
  • Document all recovery actions, including dates, amounts, and vendor communication.

12. Review Closure:

  • Prepare a final report summarizing findings, recoveries, and recommendations for process improvements.
  • Present the report to senior management or the appropriate committee.
  • Implement recommended changes to AP processes and controls.

13. Follow-Up:

  • Schedule a follow-up review to ensure process changes have been implemented and are effective.
  • Monitor AP processes regularly for any signs of recurring issues.
Accounts Payable Recovery Checlist
This checklist serves as a guideline. Depending on the size, nature, and complexity of your organization, some additional steps or specific details might be necessary. Consider involving an internal audit team or external consultants specializing in AP recovery to ensure a thorough review.
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