How PRGX helps category management and merchandising leaders.
As businesses face a winter of uncertainty, a new acronym is making the rounds: VUCA, military shorthand for volatility, uncertainty, complexity, and ambiguity. Going into 2021, that’s the environment procurement and accounts payable teams currently find themselves in.
Office processes, systems, and work styles that functioned reliably for years have been shredded and pushed aside, replaced by working from home, collaborating online, sharing documents in cloud folders, and of course, video calls.
At PRGX we’ve faced the same challenges. Projects planned for months were quickly re-engineered for the realities of the pandemic. Objectives, considerations and sensitivities that would have been discussed around a boardroom table, suddenly had to be addressed via shared screens on conference calls.
Dealing with those changes has taught us some worthwhile lessons about how to manage audit programs effectively through a crisis. Here’s how we at PRGX adapted.
Managing Audits in a Time of VUCA
We’ve responded to the pandemic’s new operational realities by re-evaluating how we conduct contract compliance and recovery audits. We realized that practical adjustments had to be made if we were going to continue partnering with clients effectively.
Auditors went through training and tutorials to become experts in remote working, whether at home or in one of the remote audit centers we’ve created. We’ve integrated remote access to data and documents into our process, allowing us to continue validating and documenting recoveries without taking up space in client offices.
That lightened the load for clients in terms of how they collaborate or make information available to auditors. We’ve also -invested in new technology platforms that let us expedite the processing of client data, examine contracts for risk of leakage, and perform accounts payable reviews more efficiently.
Along the way, we’ve identified four ways to make audits run smoothly when things are in flux.
Four Tips for Managing Audits During a Crisis
01 Ramp-up Communication
Businesses have had to replace the structured meetings and the normal, ad hoc interactions we take for granted at work to ensure that nothing is missed out and projects stay on track. That has meant greater use of collaboration and conferencing tools to stay in touch with audit team members and sponsors on a regular basis.
Most team meetings have shifted from face-to-face to virtual, which requires a different approach to planning. Multiple geographies and time zones need to be accommodated, and content required for a virtual meeting differs from that for face-to-face.
It’s useful to develop templates which can be tailored to individual audit programs as required. Adopting file sharing services can also help ensure everyone has access to invoices, contracts, change orders, reports and other essential data necessary for collaboration.
02 Focus on Sector-specific Impacts
The pandemic has affected industries differently. It’s also worth giving extra attention to vendors that sit in industry sectors hit hardest by COVID-19, for example, travel and aviation, to minimize risks of not being able to recover on claims.
Improved demand planning and working more closely with key suppliers to optimize terms can help minimize disruption and facilitate unexpected changes in order volume.
03 Consider Special Measures for Shared Services Centers (SSCs)
To overcome the loss of streamlined workflow they rely on to deliver value, SSCs have had to take a more urgent approach to technology adoption and process re-engineering.
Some procurement functions, for example, have set up “SWAT teams” to identify critical vendors and to better understand all the provisions that exist within their contract terms and conditions around business continuity plans.
Reviewing supplier contracts closely can ensure that SSCs take a systematic approach that doesn’t miss opportunities to secure more value.
04 Review Accounts Payable Data on a Shorter Timescale
Start reviewing accounts payable data closer to the activity. Working closer to the date of a transaction under scrutiny makes the resolution of any claim easier.
Acting quickly on recoveries improves the likelihood that you’ll get money back and help make recoveries happen faster. Your audit provider will also have better visibility of what caused the error in the first place, enabling them to drive process improvement suggestions that can be implemented more quickly.
Don’t let audit projects stall.
With restricted access to offices, and new workflow still settling, some things will have slipped through the cracks. In a rush to keep cash flowing, supplier AR teams may have been distracted or prone to take short-cuts.
In a time of VUCA, the risk of losses from non-compliance with contract terms, missed credits, and overpayments is at an all-time high. The rationale for sustaining contract and recovery audits — and making sure they deliver full value — is stronger than ever.
Want to know more about keeping audits going through disrupted times? Check out our Webinar and E-book.