Because the good application of some negotiated purchasing conditions is difficult to monitor, companies use to pay more than expected for some of their Accounts Payable transactions. Overpayments in an organisation’s business system are intangible, not noticed – and if left for too long – unrecoverable.
Overpayments occur as a result of several main reasons:
- Pricing errors, particularly for complex pricing structures
- None application of rebates and discounts
- Over charged logistics and transportation costs
- Unclaimed credit notes
- None consideration of pre-payments in the final invoice/payment
- Over paid VAT due to a miscalculation
TALA Consult performs an audit to identify these potential overpayments and help the client recovering the related amounts.
TALA Consult uses the most performing tools of the market to maximize the volume of transactions audited and to increase the accuracy of the final results. Our consultants are trained to identify specific risk factors within purchasing and accounting processes favouring overpaid invoices and vendors.
After performing interviews and understanding your internal processes, our consultants will proceed to the extraction of mass data. Some selected purchasing contracts are analysed and serial checks are done to verify if the invoices amounts are compliant with the contractual terms. When needed, a complete review of all the transactions is realized.
For clients using SAP, the data extractions can be directly performed with our SAP certified tool in less than 30 minutes. This improves considerably the time execution of the project and preserves the time of your resources.
When overpayments have been identified, TALA Consult can assist the client by preparing the communications to the vendors and claim the related amounts on the behalf of the client.
In addition to a project of “Duplicate Payments tracking”, we performed for our client (a consumer goods manufacturer) an audit in order to identify overpayments linked to the non-application of contractual purchasing conditions. The scope of the project included different expenses (such as freight, warehousing, telecommunication and others). Our consultants analysed more than 25.000 transactions (65.000 account lines) for a period of two years representing a total amount of 190MEUR.
We identified a total of 182K€ of overpayments.
What is the involvement of the client on this type of project?
Since the project is fully performed by the TALA Consultants, the implication of the client is just needed for the data extraction and for the validation of the final result.
What is the cost of this type a project?
TALA Consult remuneration is based on the results of the projects. We provide this success fee remuneration scheme for all projects of our “Cash Management” offer. Contact us here to receive our pricing structure.
How can we reduce overpayment risks for the future?
By performing this project your company benefits also of this risk assessment. Once cash leakages have been identified, TALA Consult delivers a report including proposal for improvements in order to reduce overpayments in the future. We can work also on your internal vendors’ master file to identify potential risk factors and suggest you some modifications to avoid overpayments.