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Here are the top two reasons why a outsourcing your accounts payable functions with an independent third-party recovery audit is imperative.
Whether you have offshore or nearshore accounts payable, it can bring cost savings, scalability and specialized expertise, but it also poses challenges related to communication, financial leakage and quality control.
When offshoring your payables functions communication is vital, language can cause misinterpretation, lack of understanding and a breakdown of processes.
Client Example: Language misunderstanding and workflow process failure caused financial leakage, lost profits and a process overhaul. For our client, any credit or debit from a vendor was reviewed by the Accenture team, if approved, they emailed the client operations team who would then enter it in the system if they also agreed with the credit or debt. If they did not agree, they pushed it back to Accenture for more information. This led to an enormous amount of wasted time and recovery dollars that were missed internally but were then found during an Illumis accounts payable recovery audit. Ultimately, they were turning down owed money due to a flawed process. With our expertise, they have learned how to overhaul the credit and debit process and ensure the cost recovery process and communication methods are timely, clear and understood.
Another area of concern is combining accounts payable services and audit functions with the same offshore company. This is not a best practice from an auditing perspective. It is generally recommended to maintain independence between the functions of accounts payable and auditing to ensure proper checks and balances.
A recovery audit should be performed by a specialized recovery audit firm that is separate from the accounts payable function. Implementing a continuous recovery audit process offers benefits beyond recovering profits in the areas of process improvement, data accuracy, and risk mitigation and provides reliable information to stakeholders.
Client Example: Our client, a large media corporation, was initially not in favor of conducting our annual recovery audit after they offshored their accounts payable functions to Genpact. They felt they could save money as Genpact offered to conduct a recovery audit as part of their services. We explained this creates a “fox guarding the hen house” scenario. They reconsidered their options and selected Illumis to conduct a post-offshore review, which produced 90% more cost recoveries.
While outsourcing your accounts payables can bring you many benefits and added productivity, errors will still happen. It is best to have a plan in place to audit each year to make sure your operations are running efficiently, and profits are recovered.
Working for Illumis for 21 years, Brush has been instrumental in the growth of the company. Brush served as Vice President at Illumis before stepping into the role of President / CEO and has been involved in all aspects of the company’s business throughout his career.
Brush’s approach to his role centers on the motto of Illumis, Bright Ideas for Better Profits. Known for his loyalty, team building, and tough but fair expectations, he empowers employees to deliver, therefore fostering a company culture that ensures customers can count on people.