According to one vendor:
AP departments face daily challenges, including fraud, data decay, product returns, and errors — resulting in transactional errors and [lost] credits with suppliers. An ongoing, comprehensive review of your suppliers’ AR records, known as a statement audit, recovers these dollars for your company. If you’re not performing a statement audit, you’re leaving money with your suppliers.
And this is true, but is there enough money being lost to make a recovery audit worth it? Some statistics state that, for an average Fortune 500/Global 3000, a traditional average recovery audit will only uncover 50,000 to 100,000 in vendor credits for every 1,000,000,000. That’s a best case savings of only 0.01%. I can march into an office supply vendor and demand 10% off the top (before I take my business across the street), get it, and probably save you that much from 10 minutes of negotiation. Considering that the average company will spend well over 1,000,000 on office supplies, taking 10% off of that is well over 100,000 dollars, and quicker than a traditional recovery audit (where a team of “analysts” pour through transactions hoping to find duplicates you don’t know about).
However, using technology and analysis, some companies are able to recover an average of 600,000 to 1,000,000 in vendor credits for every 1,000,000,000 in a recovery audit, and even though this is still only 0.1%, that’s enough money to make it worth while if it doesn’t cost you very much. And in some cases, the leaders are able to recover 5,000,000 for every 1,000,000,000, and that’s always worth it no matter how big you are. Especially if you can get a good contingency-based arrangement.
And it’s even better if, in the process, the vendor, using SIM-powered technology, can identify problems with your supplier records that you need to fix to prevent such errors from happening again in the future. So where do you look for such a vendor? Stay tuned!