In dollars, that means if your total A/P is $1 billion, approximately $10 million will be over payments.
There is millions of dollars in payments to thousands of vendors which make it nearly impossible to achieve 100% payment accuracy, even for AP Managers who have implemented the strongest of controls.
Despite all the advances in technologies and process improvements, overpayments remain commonplace in the industry.
Many retailers, grocers and manufacturers carry between 25,000 and 50,000 SKUs
Managing this vast assortment of product creates a lot of transactions and complex vendor arrangements which require a large workforce devoting a lot of time and energy to resolve.
While most retailers realize that profits may be lost in payment discrepancies (over payments), missed promotions, missed rebates, unpaid discounts and other variances from negotiated agreements (contracts) with vendors. These discrepancies are buried in millions of lines of daily transactions and claiming and recovering the cash often takes years, if recovered at all.
With competition increasing in all industries, more contracts are being written and they are becoming more complex. With all of these new contracts, it is becoming too easy to neglect them and to assume that the organization is, in fact, getting what it paid for. In addition, contracts are becoming more complex because of complex pricing calculations and are often dependent on manual activities. This leads to a higher risk of human error and more time and energy is required by a companies A/P Department.
RRG Can Help!
We know vendor contracts inside and out, and we will spend time to go over each and every detail of the contract to find benefits that you may not have found.
We work with your vendors to reconcile any open checks to unpaid invoices on your account. If we determine that the payment liability no longer exists, or has been otherwise satisfied, the open payment can be voided, and the liability reversed in the payables system. If the liability is owed, we work with the vendor to have the lost check reissued so that the open item can be reconciled. We do all of the work for you, contacting vendors to resolve outstanding checks and documenting all correspondence.
We offer companies protection from overpayments. We audit for nearly a hundred different type of errors (duplicate payments, wrong vendor payments, missed promotions, missed cash discounts, missed credits, unapplied cash…) – and we customize our audit for each client.
We provide AP Management with effective controls to recapture overpayments that slip through the cracks, without causing problems with your vendors.
Throughout the process, we provide you with free reports that highlight root causes of overpayments and recommendations to prevent them from going forward.
If You’d Like To Learn More…
…About how to prevent overpayments to your vendors, and how to prevent this abuse going forward, contact us today by clicking the button below.