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Recovery Professionals

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FAQ
Q. How much time is required on our part?
A.
We don't need much time to start a project. Some time is needed to learn internal procedures, tour the facilities and find where the invoice files are located. After the indoctrination phase, we will interface with the contact person for perhaps ten minutes a day at most. This time is spent discussing individual claims and details of vendor issues. We have been known to walk an office and start looking at files within ten minutes.
Q. How much work is required of the accounts payable staff?
A.
There is no work required of your staff to do any audit research or vendor contact. Our approach is to perform all steps in the recovery process. This saves you the time and expense of having your staff involved and makes for a more efficient audit. We may need to ask a few questions or speak with others in the company to learn more about certain transactions as the need arises.
Q. Who will be affected by the work you do?
A.
Our point of contact is usually the a/p manager or a/p supervisor. He/she will monitor the claims recovery and deal with issues and manage the audit feedback. Other departments may be contacted for information—manufacturing, tax, IT, marketing, and purchasing. The purchasing department in particular can be a source of significant findings because they have details of pricing, discounts and special deals.
Q. What equipment or services do you need from us?
A.
We need a workspace and a phone with a dedicated extension number so that we can make phone calls to the vendors and receive calls and voicemails from them. We will bring in our own computer equipment which will be totally separate from your own system. If you have a connection to your network, read-only access into the company's database is helpful, as is an email account to communicate with the vendors.
Q. Why do you need an electronic file of payment information?
A.
The transaction history file is very important during the analytical review of the payment files. We refer to the database when we do the vendor review. Electronic audit methods will isolate claims that cannot be found manually. The electronic file is manipulated to identify duplicated transactions and entries that don't fit a logical sequence. Claims will increase by 20%-25%.
Q. What is the general process of the audit?
A.
We will examine the paid invoice files starting with the earliest year audited, working forward year by year through every file, looking at every invoice. We look at capital expenditures, utilities, services, merchandise purchases, freight, expense items, sales and use tax returns and other non-arm's length transactions other than payroll and employee expenses. Some issues are uncovered by reference to contracts, such as price protection, delivery terms and effect on pricing, return policies, rebates and other promises made by the vendors.
Q. How will you deal with our vendors?
A.
We deal with all vendors professionally and with courtesy and respect for the relationship you have with them. We donšt want to disrupt ongoing relationships. We call the vendors to discuss the transactions we find and to gather information. Usually the contact with the vendor is a straightforward matter of asking them to explain how they recorded a transaction we have found. We represent ourselves as part of your team "from the accounts payable department" so they are more comfortable with our approach. At the beginning of the engagement we will review the first potential claims with you so that you become comfortable with this process.
Q. What is the claims collection process?
A.
We obtain written confirmation that funds are reimbursable so that there is no misunderstanding about the recovery items. Where a vendor is a current and active vendor, a credit note is accepted which can be deducted on a subsequent payment. If the vendor is inactive or does not have much activity, a check reimbursement is the best method. Checks come directly to your company, to a contact person as arranged.
Q. What documents do you furnish to support the claims you find?
A.
We provide documents and schedules sufficient for you to understand the history and settlement of each overpayment. This may include copies of checks, purchase orders, invoices, statements, receiving documents, credit notes and prepared schedules of transactions.
Q. Where do you do the work?
A.
We like to work in your offices, handy to the files and other paperwork that support the claims and nearby to other department personnel who may have important information. We don't have to be located in the accounts payable department; we can be in any office area in your facilities or in the area where files are stored.
Q. How long will the audit take?
A.
It will take about two weeks for us to get our bearings, understand your business procedures and internal routines. Then it is a matter of going through each file from the beginning to the end. It takes time to do a thorough job and a good job. One of our key success factors is that we're very thorough. We go through all the files and don't "cherry pick" the big claims while ignoring other opportunities. We start in one box or file cabinet and don't stop until we have reviewed all of the files. As for individual recovery items, it becomes a matter of time vs. reward. If time is an issue we will adjust our work accordingly to suit your expectations.
Q. Will the audit team change as the work is done?
A.
We are very proud of our audit staff. Unlike other audit firms who may use inexperienced staff, our auditors are all CPAs and/or have over 15 years related experience. They know where to find problems in large company accounting systems. Each auditor is expected to stay on the job until it is complete. Once in a while they may need some time to follow up claims at another company, just as they will have to follow up your claims after the end of your audit project. The audit personnel are mature and stable professionals. There is every expectation that they will be available should you wish to have them do a repeat audit later on.
Q. What will you report back to us?
A.
We will provide you with a list of the amounts that vendors have agreed that they owe back to you, with the vendor names, accounts numbers and the reason for the claim. You will receive this list as soon as several claims are identified. We will reissue it whenever other claims are added, or whenever you request a copy. We will report to you verbally or in memo form when we find conditions that warrant attention, including sales tax issues, processing routines, issues of internal control and similar matters. At the end of the project you receive a management report including a final tally of the claims, information on the database of payment transactions for the years audited and a compilation of the issues we have identified, including suggestions to reduce payment mistakes in the future.
Q. What will happen after the audit fieldwork has been completed?
A.
We will continue the vendor contact and collection process after we finish the fieldwork. Since we are a local firm we can be on site as needed. We will update you as the collections are clarified. All you need to do is to monitor the deductions and the check receipts as they occur.
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