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Recent Examples Highlight the Importance of Accounts Payable 'Health Checks'
Benefit Invoice Mis-scan - Recovery £22,572
In October 2020, the supplier issued an invoice for waste disposal services totalling £228 or more precisely £228.00
However, the invoice was mis-scanned for £22,800!
Below is an extract from the original invoice, you can see how this error may have occurred as a result of part of the suppliers logo runs through the invoice values.
This invoice was then authorised for payment and subsequently paid to the supplier, shown in the suppliers statement below.*
Result
The supplier was contacted on behalf of client who confirmed the overpayment which was still resulting in a significant credit nearly 18 months later.
There as a subsequent refund of the full amount of £22,800 recovered within seven days of contacting the supplier.
Benefit Training Course overpayment - Recovery £11,400
In 2019, a management training course was booked to start in 2020.
Due to the pandemic, the course was cancelled and re-booked to start in 2021.
A supplier credit note was raised for the cancellation of the 2020 course and a new invoice was raised for the 2021 course.
Again, due to the pandemic, the course cancelled was and re-booked to start in 2022. Again, a supplier credit note was raised for the cancellation of the 2021 course and a new invoice was raised for the 2022 course.
However, whilst all invoices were processed, only one of the credit notes was received and processed by our client resulting in an effective overpayment to the supplier.
Result
The supplier was contacted on behalf of client whose statement showed an unallocated ‘payment on account’ for the most recent payment as all credit notes had been ‘contra’d’ off by the supplier.
Supplier then agreed to refund immediately the full amount of £ 11,400.
Benefit Supplier Duplicate Billing - Recovery £44,746
A utility provider was ‘re-billed’ two internal raised invoices (with both being sent out to the client). As a result, both the ‘internal’ and ‘external’ invoices were received, processed and paid by our client.
Invoices were for the same value but completely different invoices and dates. The well known phone services supplier had received the money but had accounted for the overpayment as a miscellaneous receipt.
Result
The supplier was provided with full remittances details and the supplier located overpayment and refunded the £44,746.25 in full.
Highlights/observations
This demonstrates how simple (but material) errors can go un-noticed.
It also shows how suppliers are no longer ‘highlighting’ or ‘refunding’ overpayments received.
What’s more, this shows often significant benefits
direct to the organisation which
can be used to address budgetary
pressures and/or fund resource
requirement.
Twice2much specialises in ‘spend recovery services’, working with Finance Directors, Accounts Payable Managers and Heads of Audit to provide a comprehensive review of Accounts Payable spend
Review Stages and Potential Value of Reviews
Twice2much provides the time, resource and expertise that many in-house teams cannot justify resourcing internally. Every example ‘highlighted’ resulted in a significant direct benefit to our clients.
More importantly, whilst these highlighted examples are intended o provide some food for thought, they represent only a fraction of the duplicates identified and recovered on behalf of clients.
Whilst overpayments can occur in any organisation, at any time, clearly the global COVID-19 pandemic has served to exacerbate the risks, with the impact of working from home, stretched resources due to sickness and significant forced changes to processes and procedures.
There is simply no way of knowing how your particular organisation has been affected financially by the impact of fraud or error without undertaking a review of your payments made during this period.
However, a focused external review can enable any organisation to obtain an appropriate level of assurance with regards to their exposure to fraud and risk of error, with the added advantage that any overpayments identified and recovered provide a direct financial benefit.
Given that all reviews are carried out on a share of recovery’s only basis this achieves an effective no cost- value for money review to any organisation.
All reviews are designed to ensure there is minimal need for client resources whilst looking to maximise the potential benefit to you, the client.
The illustration above shows what a review might involve along with potential benefits and impact on resources
FURTHER INFORMATION
If you wish to contact the author of this article then their details are below:
www.twice2much.com
Twice2much specialises in ‘spend recovery services’, working with Finance Directors, Accounts Payable Managers and Heads of Audit to provide a comprehensive review of Accounts Payable spend
Recoveries made to date from our reviews:
Duplicates / Overpayments: £100m
Contract Compliance: £10m
Statement Credits: £20m
VAT: £10m
*Review Stages and Potential Value of Reviews
Download the PDF: Twice2much - Accounts Payable Health Check.pdf (1.11 mb)