Accounts Payable Audit is Essential for Your Success: Read This to Find Out Why

What is an accounts payable audit?

Also referred to as AP auditing, the point of carrying out the audit is to check for fraud risk. It’s essential that your organization’s accounts payable isn’t understated or overstated.

Audit to determine if you have overpaid or have not received credits

There are several areas where companies can overpay for products or services. This can also include situations where your suppliers have not provided credits where due. Typical findings include:

  • Canceleld Contract Credits
  • Unapplied Credits
  • Cash Discounts
  • Duplicate Payments
  • Escheatments
  • Pricing
  • Taxes
  • Volume Rebates
  • Warranty

Audit to prevent fraud

With an audit, it’s far easier to ensure that the invoices as well as statements along with any other liabilities and expenses that have been accrued by the firm have been calculated and recorded properly, the Houston Chronicle says. These goals must be met whether you’re using manual means to take care of your books or if you’re using an accounting program.

Audit to ensure completeness

Audit procedures are also done to check if everything is in order with your records. The process will ensure that you don’t miss a detail or that there aren’t any essential information missing. However, if the audit turns up plenty of problems in your books, it may be prudent to consider going for a better way to handle your accounting. That’s where hiring a team of consultants comes in. By outsourcing your payroll and getting them to work on your books, your audit results should dramatically improve for the better.

Audit for compliance

Accounts payable transactions are expected to follow accounting principles. Is that the case for your organization’s accounting procedures? If the audit trail of your transactions and accounting procedures doesn’t seem to do so, then you could land your firm in big trouble. Good thing there are companies that offer managed services for accounts payable so you can address these problems. With help from experts, you won’t have to worry about non-compliance issues getting in the way of your operations. Furthermore, you can ask your team of consultants for help with implementation, upgrades, technical assistance and more, all of which will help your company run without any problems.

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