Spend Recovery

What are the Important Facts Concerning Spend Recovery

Spend Recovery vs Duplicates Recovery

1. Spend Recovery

  • Definition: Focuses on identifying and reclaiming money lost due to errors, inefficiencies, or non-compliance in the procurement and payment processes. It includes a broad analysis of spending patterns to detect and address recoverable errors.
  • Scope: Comprehensive; covers various issues beyond duplicates, such as incorrect pricing, unclaimed discounts, taxes, overpayments, or policy violations.
  • Process:
    • Analyzes all spend data.
    • Identifies anomalies like overcharges, missed rebates, or unused credits.
    • Addresses systemic inefficiencies to prevent future losses.
  • Outcome: Improves overall financial health by recovering funds and optimizing spending processes.
  • Example: Recovering funds due to a supplier charging higher-than-contracted prices for goods over a period.

2. Duplicates Recovery

  • Definition: A subset of spend recovery, specifically targeting duplicate payments or duplicate invoices within an organization’s accounts payable or procurement processes.
  • Scope: Narrow; focuses solely on identifying and recovering payments or invoices processed more than once.
  • Process:
    • Detects duplicate invoices (e.g., identical invoice numbers, dates, amounts, or descriptions).
    • Flags payments sent multiple times for the same invoice or service.
    • Rectifies errors and works with vendors to reclaim funds.
  • Outcome: Reduces financial losses from duplication but does not address other areas of spend leakage.
  • Example: Recovering funds after identifying that a vendor was accidentally paid twice for the same invoice.

Key Differences

Aspect Spend Recovery Duplicates Recovery
Scope Broad (includes various spend inefficiencies). Narrow (focused only on duplicates).
Focus All forms of recoverable spend errors. Duplicate payments and invoices.
Process Holistic data review and spend optimization. Targeted checks for duplicates.
Outcome Systemic improvements and higher recovery. Reduction in duplicate payment losses.
Examples Overcharges, missed discounts, tax errors. Duplicate payments or invoices.

When to Use Each Approach

  • Spend Recovery: If the goal is to optimize the entire spend ecosystem, address multiple sources of financial leakage, and improve operational processes.
  • Duplicates Recovery: If there’s a specific concern about duplicate payments or a need to quickly address a known issue in accounts payable.

Ideally, duplicates recovery is a step within a broader spend recovery program.