Revolutionizing Accounts Payable: The Rise of AP Audit Tools in the Next Generation of Recovery Auditing

The Accounts Payable (AP) Recovery Audit industry emerged decades ago to address over-payments, over-charges, and accounting errors in medium and large-sized companies. Due to the high volume of transactions, companies found it challenging to audit all supplier payments accurately while managing daily payables tasks. Over the years, AP Recovery Auditing has developed sophisticated techniques and trained auditors to identify numerous ways of overpayments and recover funds for clients.

With technological advancements, manual systems have been replaced by ERP systems, imaging, and workflows, resulting in increased efficiency. AP leaders have developed processes and internal controls to manage compliance and achieve a higher level of payment accuracy.  However, errors can still occur due to  ERP conversions, upgrades, additions of new technology, staff turnover, new team members, workarounds, and unforeseen risks. Standard AP Recovery Audits, historically reviewing one to three years, remain a best practice despite advancements.

The traditional approach involves outsourcing audits to recovery audit firms, but the emergence of AP Audit Tools is changing the landscape. While outsourcing is still common, organizations seek to minimize fees paid to third parties AP Auditors, identify issues sooner and  utilize supplier credits timelier by performing AP audits in-house. AP Audit Tools can be SaaS and leverage the knowledge of AP professionals, providing a cost-effective alternative to recovery audit firms.

A notable challenge in AP departments is supplier statement reconciliation, often overlooked due to resource constraints in AP departments. AP Audit Tools address this issue, facilitating efficient reconciliation and identification of open credits, matching paid invoices, identification of missing invoices and improving supplier relationships.

Duplicate payment avoidance is a crucial goal for AP departments, and although ERPs catch most duplicates, they can still occur. AP Audit Tools, designed by professional Recovery Auditors, use advanced technology, including AI/machine learning, to minimize false positives and enhance accuracy in identifying duplicate payments.

As technology continues to integrate into payment processes, AP Audit Tools are becoming an essential part of the AP toolkit. Organizations are drawn to the efficiency, process improvement, maximized cash flow, and improved supplier relations offered by in-house auditing tools, making them the next generation of AP Recovery Auditing.

Talk with SAS to learn more about empowering your AP team to perform Recovery Auditing in-house.