A technology company with over $5 billion in annual spend and 16,000 vendors wanted to identify potential overpayments made to vendors. They also wanted to identify potential risks in their accounts payable process. The company’s internal audit team had already red-flagged some vendors, which raised concerns with executive management. Along with identifying overpayments, the client also wanted to automate identification of risk areas and unusual activity going forward.
Approach
Approach
Selective Findings
Outcome & Deliverables
- A large number of inactive vendors in the vendor master who were not been paid in the last 24 months.
- Multiple vendors receiving payments without Tax-Id populated in Vendor Master.
- Quantity variances identified between PO / Invoice and Delivery documents.
- Price variances between different vendors supplying the same product to the company.
- Large price variances of the same products sold by the same vendor to different teams within the company.
- Duplicate invoices paid due to a process error in the firm’s duplicate invoice identification methodology.
- Vendors charging more and being paid than the contracted amount.
- Vendors not complying with contract terms by not awarding bulk discounts or paying rebates for bulk purchases.
- Vendors not meeting contracted SLA terms.
Outcome & Deliverables
- Risk assessment of vendor payment processes.
- Recovery of over $5M from vendor overpayments.
- Vendor and payment risk profile dashboard for management.
- Recommendations for mitigating identified risks.
- Development of training material for employees to prevent and detect future losses through overpayment.