Originally appeared on Supply Chain Quarterly, January 24, 2021
For finance departments around the globe, COVID-19’s altered reality has been a massive wake-up call.
Uprooting operations exposed issues and inefficiencies that companies had not expected. From purchase order to goods receipt, invoice receipt and payment, accounts payable teams are now re-evaluating their processes and firming-up their controls.
Even before coronavirus, accounts payable teams faced a growing volume of invoices that got bigger every year. The scope for overpayments caused by unrecognized rebates, duplicate invoices, and other common mistakes was growing along with it.
Some erroneous payments can be explained by human error, but often they signal missing controls that could potentially stop mistakes before they happen.
Whatever their cause, the cumulative impact of invoicing errors erodes margin and eventually leads to big losses. That’s why recovery audits are back on the agenda.