Today’s AP self-audit tools provide powerful data analysis and reporting to detect a wide range of transaction errors such as duplicate payments, pricing and discount anomalies, fraudulent trends/patterns, and data quality issues. Most tools contain claim workflow management to ensure that once a recovery is identified it is tracked until final resolution.
In a continuous controls monitoring (CCM) environment, a self-audit tool for the accounts payable process can provide both detective and preventive controls. When properly used, the tool can prevent a duplicate or erroneous payment from being made. The tool can also detect a process issue by combining additional analytics with audit results and by reviewing supplier payment trends.
Most self-audit tools help establish a historical database of at least two years of payment data. This data usually contains supplier master details, invoice details (header and line item), general ledger information, ERP document information, and payment information.
A production process then occurs in that a current payment file is sent to the solution provider to apply against the historical database. In a CCM environment, the payment file is sent daily or whenever there is a payment run within the accounts payable process.
Some companies prefer to use the self-audit tool as in a payment recovery mode. This means they’ll review payments already made to suppliers and will only send payment files on a weekly, monthly, quarterly, or annual basis for review.
With an automated AP self-audit solution, there are usually five steps as recommended below. Depending on the solution and the user approach to implementation, the steps may change.
Many automated self-audit tools provide several different duplicate payment types. A “fuzzy logic” process is used to map current payment data against a historical database to look for payment errors. It’s up to the user to identify the duplicate payments and take the correct action in either stopping the payment or collecting the payment from the supplier. If a payment has been made to the supplier, a check or credit is collected as resolution.
Here a few examples of duplicate payments to consider: