Some of our Recent Successes
A manufacturing company was willing to pay 10 times the normal cost on sample merchandise because of the cost to the supplier was higher - due to the labor to produce the samples. The cut off point was at a certain number of units ordered. Orders exceeding that number were supposed to attract the lower cost per unit pricing.
After an in-depth review of past invoices, we found that the supplier had been charging the higher sample pricing rate on orders that exceeded the minimum.
This find allowed us to recover tens of thousands of dollars over the audit years and allowed the client to correct this issue going forward.
A prominent restaurant supplies distributor reestablished their profitability when we uncovered an anomaly in their accounts payable process that had been causing them to pay more than once for the same merchandise.
Thinking it couldn't happen to you? So did the client's accounts payable manager. She told us that this was impossible because a separate purchase order and invoice was required on every order. The system would only allow the invoice and purchase order to be paid one time using those document numbers. No back orders were allowed and, if sent in, they would return them.
After taking an in-depth look at both past invoices and their payment processing system -- we identified the problem.
We discovered that when invoices came in without purchase order numbers, accounts payable would research them and, if there were no records of any payment, they would forward the information to the buying departments. The buying departments then researched the invoices and returned them to accounts payable with a new purchase order number. Meanwhile, the vendor submitted a second invoice with the original purchase order number. We found that these duplicate invoices were paid using the same receiving documentation.
A department store chain we worked with just a few years ago is proof that when searching for lost money, there is often more than one area of the AP process that needs to be researched.
This company regularly returned large quantities of merchandise after the holiday season. The per-unit price of the goods purchased was returned to the supplier at a lower price.
However, the system did not recognize the regular price merchandise being returned with the reduced price merchandise. We recovered thousands of dollars on these discrepancies.
We also ran some freight reports - and uncovered the fact that many shipments were in violation of procedures.
Not only were unauthorized freight carriers being used - but single orders were being split. It was not a question of supply delay as these orders were delivered over two or three shipments delivered the same day from the same location.
This was clearly outside the purchase order guidelines and the department store had been paying out large sums for the extra freight charges. The freight overcharge was recovered for tens of thousand of dollars.
These are just a few of the clients we've been able to assist over the years. Even if systems are in place to eliminate errors and incorrect processing - duplicate payments, overlooked term or cash discounts and missed allowances can still occur.