While we invite you to contact us so that we can address your questions specifically to your business, below are some commonly asked questions regarding "Recovery Auditing."
- What is a Recovery Audit?
A Recovery Audit is a historical review of past Accounts Payable and other cost transactions. It is, performed to detect payment errors which have already occurred, and to discover existing weaknesses within the procure-to-pay process which have the potential to result in payment errors. A full scope Recovery Audit will involve a review of general Accounts Payable transactions, Contract Compliance, Sales & Use Tax, and other transactions which may be specific to a particular type of business. As the audit is performed and historical errors are discovered, consultants work to rectify these payment errors and bring those lost profits back to your bottom line. If weaknesses within the payment process are discovered, that could potentially result in a future payment error, our consultants work with your personnel/employees to strengthen the processes and eliminate the weaknesses, therefore preventing the future errors.
- When should I perform a Recovery Audit?
It is beneficial to perform a Recovery Audit at any point in time, as payment errors can result on an ongoing basis. However, an optimal time to engage this review is when your company has undergone some type of change, as change in the business environment always increases the chance that payment errors will occur. Changes that have historically resulted in payment errors for many companies include the upgrade/conversion in computer systems, centralization or decentralization of various departments involved in the procure-to-pay process, mergers or acquisitions which either incorporate or retire business units from the business group, rapid growth rate in the company, or rapid reduction in the company business and/or staff.
- How long does it take to perform a Recovery Audit
for my company?
Several variables affect the time required to perform a Recovery Audit for any given company. The sheer size of the company and the number of transactions flowing through the procure-to-pay process is a major factor, as is the type of industry and whether or not the business units interacting with the procure-to-pay process are centralized or de-centralized.
- How much of my time will be required in performing
a Recovery Audit?
Prior to the commencement of the Recovery Audit some preliminary work must be performed. Our consultants and IT Department will work with your IT Department to obtain your electronic payment data to be reviewed, and process this data. Next, our consultants undergo an initial and brief orientation to your business and computer system. After these initial activities, our consultants work very independently to perform the audit and recover the lost profits, requiring very little of your time. We do like to keep you informed of the progress of the audit and the resulting findings, therefore we provide weekly updates in the form of brief meetings and/or written reports (as you prefer). While it is not necessary for you to commit a lot of time to the audit, we welcome you to be involved as much as you would like.
- How much will it cost my company to have a Recovery
In general, there is no up-front cost to perform a Recovery Audit, as Spectrum Consulting receives fees for performing the engagement on a contingency basis. Your company is billed a percentage of the lost profits recovered, only after those lost profits are returned to your bottom line through the return of the payment error by check or credit memo. Therefore, if a review is performed and no payment errors are discovered, you pay nothing.
- What benefits can I expect from having a Recovery
In addition to the return of lost profits to the bottom line, in the form of actual cash deposits or credits to accounts, there are other benefits as well. Spectrum consultants use a two-directional approach in the Recovery Audit methodology. Each error detected during the course of the audit is analyzed to discover the root cause. We then work with your staff to strengthen the process weakness or procedure that caused the error, to prevent re-occurrence. Additionally, Spectrum consultants review your entire procure-to-pay process to determine if there are any process weaknesses (either manual or automated) that have the potential to result in a payment error. If there are any weak areas found, our consultants again work with your staff implement cost effective controls to prevent future errors from occurring. This is especially helpful for those clients who are required by the Sarbanes-Oxley Act of 2002, to demonstrate that all policies and procedures include proper and adequate controls.
- What factors should I consider when choosing a firm
to perform a Recovery Audit for my company?
When choosing a firm to perform Recovery Auditing Services, it is important to gain assurance that the consultants assigned to your engagement, have the depth and breadth of experience to provide you with the most comprehensive and cost effective audit possible. Experience in many various industries, both domestic and international, will serve to provide you with state of the art "Best Practices" and the highest customized audit for your industry and particular business. Further, if you are required to comply with the Sarbanes-Oxley Act of 2002, your Recovery Audit provider should be well versed in SOX compliance services. Recovery Audit Services should complement and enhance any Sarbanes Oxley work you have planned or completed, and need to be performed in a manner in which will not conflict with the work you have already implemented. For more information on "How to Choose a Recovery Audit Firm", please contact us and we will send you our full informational document on this topic.
- I have several projects in my budget this year that
I need to complete, including a System Conversion. Can
Spectrum help me with that?
Absolutely! Spectrum's customized approach to all services allows us to design a service plan that is specific to your needs. This means that we can manage your conversion project while at the same time ensuring that it meets SOX compliance, if applicable, develop new processes and procedures, conduct fixed asset audits, provide staffing augmentation, etc. We strive to provide the work you need, the way you need it.
- How do I get started?
We invite you to call or email us for more information on how our customized services can benefit your particular company. We look forward to speaking with you soon.