Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
Completing an accounts payable audit isn’t easy. Many teams are often juggling too much to handle a large-scale internal audit, not to mention the limited time, staff, and technological resources. Despite having numerous controls in place, AP teams often need to outsource to pick up the excess work of an audit. That’s where the external audit comes in.
What is an external audit?
An external audit is an independent examination of an organisation’s financial records to ensure compliance, accuracy and efficiency. It tends to cover a specific, predetermined financial period, usually the previous three years or so. There are huge benefits to this. Not only do you recoup overpayments and so enhance the accuracy of your ledgers, you can also discover find inefficiencies and process improvements.
Completing an external audit
We talked to the FISCAL recovery audit team, who gave a full overview of their procedure for an external audit:
Kick-off meeting to align resources
First, our team gathers key stakeholders for a meeting to ensure everyone is clear on the needs and objectives of the project. This includes members of IT, the project owner, the AP manager and any AP team members working on the project, especially those who need to help extract the data. Where relevant, we also include members of the Procurement team.
Data extract and software setup.
For most external audits, your IT team will need to enable data access. At FISCAL, we have clear guidelines to support this, making the process simpler and faster. Meanwhile, we walk walk clients through the process, explaining in detail how it works.
Audit project goes live
Our consultant conducts the audit by running transaction and supplier data through FISCAL’s accounts payable risk management software.
Supplier statement reconciliation
We begin by creating a prioritised list of suppliers based on their historical value and spending volume. Next, we contact them to request a statement of open items. Reviewing them allows us to reveal overpayments, unallocated cash, and untaken credit notes. With our statement reconciliation software, we find those valuable discrepancies among the numerous correct transactions. As part of the audit, we aim to recover these amounts and return value to the bottom line.
In-depth analysis
We examine your invoices using our software, searching for incorrect or duplicate payments and overpayments. Our consultant liaises with your suppliers, following those problems through to resolution, including recovery where applicable.
Regular updates
Our consultants keep contact with clients regularly, usually via an online call. We notify you on our progress and any problems to solve. These frequent communications help resolve issues rapidly and for a more efficient audit.
Completing the AP audit
FISCAL recovery audit projects typically run for between 4 and 6 months, dependant on scale. Our team provide a complete report of their findings, recoveries and process improvement recommendations to minimise error and cash leakage. Prevention is often better than cure, so we advise employing further controls to avoid future losses.
Best practices.
When dealing with any external partner for your audits, compete due diligence checks on the company before giving them any access to data. Their information security practices should be ironclad, so ensure they have an ISO 27001 certificate and adhere to any codes of practice to also keep you compliant with your own information security standards.
Conclusion.
While completing an accounts payable audit can be challenging due to limited resources and time constraints, outsourcing to an external audit team can provide the necessary expertise and efficiency. By following a structured process, from initial meetings to detailed data analysis and regular updates, external audits help ensure compliance, accuracy, and financial integrity. Implementing best practices and robust controls can further enhance your audit outcomes and prevent future discrepancies.
