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What are the key components to a successful audit? What’s required to perform an A/P audit, and how do we begin? Where do you look for recoveries? What types of errors are typically found during the audit? As your client, do I have the opportunity to approve each and every recovery? If you identify overpayments, how do we collect? What happens if Pinpoint is unable to collect the overpayment? How are Pinpoint’s fees determined? What is the cost of this service to the client? I’m aware of very few overpayments made by Accounts Payable—is an A/P audit really necessary? How much profit do you estimate our company is losing each year due to overpayments? Will you provide me with management reports? Can Pinpoint accommodate other reports analyzing our vendor and payables data?. Should I expect any negative feedback as a result of the audit? Are reaudits an option after we’ve already had an audit done? Audits are essential to the maintenance of sound financial operations. For various reasons, post audits are considered a best practice for most companies. Whenever a major business change occurs, the accounts payable operations may be negatively impacted, resulting in overpayments and profit loss. When operational changes occur, certain tasks, procedures and controls sometimes fall through the cracks, as a result of high employee turnover, mergers and acquisitions, rapid growth & expansions, human input & systems errors, loss of internal or system controls, or accounts payable systems changes and/or upgrades. What are the key components to a successful audit? Timing: The best time to perform an A/P audit is as soon as possible. Reviews are most valuable to financial management when one or more significant A/P changes occur(s), i.e., implementing new systems, mergers, acquisitions, relocations, increased staff turnover or hires, A/P management changes, etc. Why, because change often results in processing errors. Keep in mind that the older the processing errors, the more difficult it is to obtain a refund. All overpayments made to a vendor have a limited shelf life when seeking repayment. Time is of the essence to the recovery of processing errors. Our root cause analysis will identify systemic problems and offer real solutions and Best Practices to reduce and/or eliminate future overpayments. An accounts payable review can also assure management that there was little or no negative impact as the result of changes in personnel, operations, processes or systems. Human error: Despite the best efforts of a company’s staff, the volume of transactions (along with how well employees understand & implement complex technologies) will produce at least some erroneous transactions. Integration difficulties: Whether implementing a computer system for the first time or converting software platforms, the data transfer that results can often be incomplete. Coordinating all of an organization’s technological and business changes across different platforms is a huge challenge, and identifying data leaks can help correct possible losses. The "e" factor: The conversion to e-commerce constantly creates new categories of business transactions that previous methodologies often can’t adequately track or record. As more enterprises adopt e-commerce initiatives, the likelihood of processing errors will increase due to mistakes in data input, the elimination of paper trails, introduction of dynamic pricing models and the lack of a single standard for defining and sharing document types via the Internet. Fluctuating economy: Monetary ebb and flow is an elemental aspect of the business world. Intense scrutiny of fund transfer and disbursement/procurement transactions is essential for surviving market downturns and preventing profit leaks. No-risk investment: Pinpoint’s post-audit solutions represent a risk-free investment of funds. Consider the recovered money as a dividend, and the fee paid as investment capital. Positive return is guaranteed, since we work on a “no recovery, no fee” basis and fees aren’t assessed on non-productive audits. There are no costs or expenses to budget, as Pinpoint works entirely on a contingency basis--we simply share in the recoveries we generate for our clients. Management assurance. Since your company’s management needs to effectively manage vendor programs (i.e. price protections, discounts, special pricing, volume rebates, special allowances, etc.) and be assured that vendors are operating as expected, Pinpoint reviews 100% of disbursement transactions. The problem is that the vast majority of ERP and legacy systems weren’t designed to provide you with access to the critical data needed from different areas within your IT systems (i.e. procurement, accounts payable, cash receipts, etc.). By utilizing advanced technologies and proven methodologies, Pinpoint can help minimize the risk of processing errors by efficiently reconciling your vendor programs and contracts, and identifying possible duplicate and overpayments payments to vendors. With our proprietary software and talented financial professionals (who have over 35 years of practical experience in accounting, internal auditing, business controls, finance and recovery auditing), Pinpoint will maximize dollar recoveries beyond what the competition can achieve. Pinpoint’s proprietary software generates audit tools that quickly identify hidden profits. In addition, Pinpoint utilizes a proven process that enables the auditor to identify overpayments and employ an effective, systematic recovery process that’s also sensitive to supplier relations. What’s required to perform an A/P audit, and how do we begin? Pinpoint’s professionals meet with you to gain an understanding of your systems, processes, procedures and objectives. We then begin to customize the audit based on your business operations. Once we’ve done that, we gather relevant historic transaction data from your IT department, going back at least 2 to 3 years. Pinpoint then creates a no-cost, independent, historical master transaction database that compiles/consolidates your data, generates audit tools (to identify any processing errors) and management reports, using our proprietary Pinpointer software. This software detects trends, patterns and payment errors leading to vendor overpayments. The use of a telephone, Internet access and a minimal amount of space is also required. Where do you look for recoveries? Since the causes and types of overpayments vary, we begin our review where the payments occur--in accounts payable. However, many overpayments originate outside of A/P, being the result of other departments’ poor internal controls, operations, contracts or agreements. Our auditors target all areas of the company to detect the source of overpayments, and examine the following archived records. • Magnetic payables data records What types of errors are typically found during the audit? Pinpoint will identify both transactional and contractual errors: • Duplicate payments Pinpoint reviews 100% of your disbursement transactions. There are a number of factors to be considered, such as ease of A/P record access, audit period covered, number of transactions reviewed, number of suppliers, and the breadth and complexity of the audit scope. (Depending on the size of the company, anywhere from 4 weeks to 16 weeks.) As your client, do I have the opportunity to approve each and every recovery? Yes. All recoveries that Pinpoint presents to you requires your approval. If you identify overpayments, how do we collect? You do nothing—we’ve got it all covered. Working on your behalf, Pinpoint performs all the necessary collection work from discovery to recovery, and collection of all overpayments. Methods of recovery include obtaining refund checks, credit memos, and vendor authorization to deduct the overpayment from a future payment. What happens if Pinpoint is unable to collect the overpayment? You owe us nothing. Pinpoint’s services are 100% contingency-based--our fees are determined by how much we recover for you. We get paid only when our clients receive the economic benefit from our recoveries first. Historically, Pinpoint collects approximately 98% of the recoveries we identify. How are Pinpoint’s fees determined? Pinpoint determines project fees by considering the complexity of the audit, transaction review volume, and the type of contracts to be reviewed. What is the cost of this service to the client? There’s no cost to you for our professional services. We work solely on a commission basis and are paid only on recovered funds. "Strictly confidential”—that’s our pledge to you. We can’t afford to violate your trust, as our business is based on references and repeat business. Vendors respond to us favorably, as they’re a source of revenue for you and Pinpoint. We’re always aware of the importance of your vendor relationships, and we strive to maintain a good rapport with them. Pinpoint’s services cross a wide spectrum of industries and organizations. Although invoice processing is mostly company or industry “neutral,” there are aspects unique to each industry or company. Each audit is customized to the characteristics of your company and operations. Our audit teams have experience in the retail, wholesale, manufacturing, utilities/energy, education, medical, financial services, healthcare, technology, capital goods and consumer industries. Our A/P operations can’t afford unnecessary interruptions from audit personnel. How much disruption to our staff should we expect? Pinpoint’s services require minimal time and staff resources. Our auditors pull and re-file all documentation, and upfront planning allows our professional audit teams to work independently—requiring little to no A/P management or staff time. In addition to recovering overpayments, will you help us improve our systems/processes, and minimize future overpayments? Absolutely—our goal is to help identify and recommend greater efficiencies and internal control improvements. We’ll evaluate the root causes of all recoveries, and at the conclusion of the audit, we’ll give you a written report documenting recommendations and best practices that will help you improve your procurement and disbursement process. We’re confident that our recommendations and consultations will create current and future value, along with future cost savings. I’m aware of very few overpayments made by Accounts Payable—is an A/P audit really necessary? An accounts payable contingency audit is considered to be the most cost-effective method to confirm your belief that very few overpayments are being made within your A/P department. It’s also considered a Best Practice to have an independent third party review historic disbursement transactions to assure management that internal control procedures and disbursement operations are functioning according to company policies. How much profit do you estimate our company is losing each year due to overpayments? A/P operations differ from company to company. However, on average, one tenth of one percent of revenue (.1%) is the industry estimate of how much profit is lost each year. One million dollars of recoveries (where the net profit margin is 5%) equates to another $20M in revenues being generated. Will you provide me with management reports? Yes. Pinpoint will use the A/P data you provided to help your operations become more efficient. We have several value-added reports: A weekly summary of recoveries, cash management analysis, quantifying specific vendor spending, reports that identify possible areas of gained efficiency, and our end-of-audit final management improvement report. This report will provide you with actionable recommendations that will help you reduce or eliminate future overpayments, and provide future cost savings. Can Pinpoint accommodate other reports analyzing our vendor and payables data? Yes. We can create custom reports to fit your specific needs. Should I expect any negative feedback as a result of the audit? No. We use the utmost sensitivity with all of your suppliers and staff. Our goal is to help you look good, as a “thanks” for engaging Pinpoint. Are reaudits* an option after we’ve already had an audit done? Yes. In addition to working with Fortune 500 companies, we specialize in reaudits for clients having used another company for their primary (or first) audit. Our reaudits should produce additional recoveries for clients, sometimes in excess of the original audit findings. * An audit of the same disbursement data a competitor just reviewed for overpayments. The fee rates charged here are significantly higher than a normal first audit because the potential dollars to be recovered decline after a primary audit. |
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