All businesses are prone to accounting mishaps and fraud. It’s a sad fact that accidents and errors happen, in accounts as in every other area of your business. It’s equally true that there will always be some people who aim to take advantage of any vulnerabilities they spot. Accounting is a complex business; invoices have many fields and if these are filled in or copied incorrectly then you could end up paying too much or claiming too little. Duplicate payments are another common problem – where an invoice is sent twice, either accidentally or intentionally. Unless you are specifically looking for them, these can slip under your radar all too easily. The result is that you pay money out where you shouldn’t, or you don’t claim money that is owed to you. That’s what an accounts payable audit is for. It tells you what the difference is between what’s in your accounts and what’s supposed to be there. Recovery audit software is designed to pinpoint where the problems are, rectify them and stop them happening again. Given the high number of errors in the accounting practices of the average SME, that can have quite a financial upside.
Some estimates suggest that as many as 0.1 percent of transactions might be spurious. Whilst that doesn’t sound like a lot, those errors soon multiply up. If your business relies on a large volume of small transactions, it could make a lot of difference – especially since turnover is not the same as profit. If you are just squeaking by, those accidental or fraudulent payments could mean the difference between your company staying afloat or failing.
Recovery audit software might seem like an unnecessary expense. However, given that an accounts payable audit can turn up tens or even hundreds of thousands of pounds worth of invoices yet to be paid for a small business, it should pay for itself the first time you use it. And remember, the longer you leave it the less chance there is of getting your money back. It doesn’t matter whether the problem is caused by duplicate payments or another of the dozen or so different errors that frequently occur. If the organisation that owes you money has gone bankrupt or ceased to exist in the meantime, you stand no hope of reclaiming what’s owed to you. Act now – it could mean a nice bonus.
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