Recovery Auditing
Financial errors, overpayments, under deductions, allowances and compliance issues create significant profit leakage. Major enterprises process millions of transactions and purchase commitments which, without sophisticated governance, will negatively impact their bottom line. Achieving 100% payment accuracy is virtually impossible for any enterprise, even those with extensive internal audit programs and stringent controls. Our core competency is finding those anomalies that impact profitability.
The major benefit of our recovery services is the capture of lost revenue and profit with minimal risk and effort to your organization. It’s a catalyst that improves your organization’s effectiveness and efficiency by providing insight and recommendations based on analyses of data and business processes.
Major Audit Categories
These audits provide the biggest exposure, and consequently, the greatest opportunity for recoveries.
Accounts Payable
We leverage sound business intelligence with robust data analytic tools on 100% of your transactional data. Our method is to effectively track all electronic support documentation into your procure-to-pay system. This comprehensive view of your payment protocol is a validation and data test from your purchasing, receiving, distribution and supply chain processes. This approach ensures payment accuracy, recognizes data anomalies and fraud, as well as finding overpayments, under deductions, available allowances and client credits due. All recovery audits are managed by our class leading proprietary and purchased data mining software. Your bi-product of our accounts payable recovery audit is the shared knowledge, our retail accounting experience and tools we provide to support your firm’s continuous improvement initiatives.
Expense Payable
We utilize spend analysis proprietary software, as well as data mining techniques and detailed exception reporting, to determine overpayments, under deductions, credits and inadvertent payments from your expense payable spend and procurement processes. Besides recovering funds, our expense monitoring platform gives excellent visibility to cost reduction and opportunity assessment programs.
Freight
Our freight program software and freight recovery audits are strictly focused on tracking and authenticating movement of merchandise from vendor or client shipping point through distribution and receiving point. The result is marshaling merchandise accurately from point of ownership and accounting for all stipulated requirements in that process. We accomplish those tasks by utilizing the client routing guidelines, freight and logistics expense offsets, and published retailer to vendor guidelines. Our freight software and auditors will recognize inaccurate freight charges, freight overpayments and wrong freight payments. We also provide support for decision making at an item and shipment level for all merchandise purchased and shipped. The end product, besides recoveries, is a managed approach to mitigating freight expense.
Operational & Compliance
We excel at compliance recovery auditing. Our services neatly fit into our clients’ efforts in risk management, expense containment, corporate governance and compliance affirmations. Our skills include, but certainly not limited to: purchase and service agreements, buying and merchandise programs, lease, CAM, real estate, sales tax, logistics, insurance, corporate edicts and policy and accounting for allowances. Our mission is to provide service that will support client profit and continuous improvement initiatives.
Real Time Auditing
EMA is one of the few firms that are capable of conducting real time auditing. Our internal processes, specialized analytics, and proprietary software execute reports to establish accuracy of payments and managed distributions. As vendor transactions are processed through your procure-to-pay systems, we are simultaneously provided visibility. As we receive your data, our audit team will analyze transaction activities and establish corrections to be made.
Fraud Control Review
Fraud is a continuous problem that affects all enterprises. It undermines operations, causes significant business risks, and impacts profit. All our recovery audit reviews incorporate fraud detection software tools along with sophisticated audit routines. These tools and techniques will provide a practical approach to risk assessment and the mitigation of weaknesses in client accounting control.
Determining Factors
Recovery audits are necessary when an enterprise has:
- Large number of transactions/vendors
- Large number of locations or changes to locations (additions or reductions)
- Changes to business environment or business model
- Organizational and/or staff changes
- Implementation of cost cutting measures
- Existence of or integration of multiple IT systems
- Recent IT system upgrade or conversion
- Current or existing merger or acquisition
Payment Structure
Our recovery audit services are provided on a contingency fee basis as a percentage of the dollars recovered. We are compensated only for actual recovery performance and results. You will not incur any cost or expense until funds are recovered from our efforts. This model enables you to implement low-cost, high-return solutions in support of recovery audit initiatives.
Customized Audit Approach
From over 30 years of implementing more than 550 engagements, we have developed agile review processes that are guaranteed to provide large recoveries. We are experts at leveraging our talents and acquired knowledge to quickly respond to unique environments. Our combination of excellent staff accountants, data analysis and mining expertise, current robust technology and software tools will always deliver superior results.
Affirm Goals, Objectives & Challenges
Gather Data & Refine Understanding
Research & Revise Assumptions
Document Findings & Results
Report Findings & Recommendations
Initial Management Review
- Understand company’s goals and objectives
- Gain full comprehension of ERP/financial systems
Data Collection
- Identify and gather required data from systems and processes
- Refine audit approach
Data Analysis/Mining
- Transcribe data and execute into proprietary reports
- Use customer queries to uncover client specific claim types
Data Audit
- Identify and research potential recovery claims
- Prepare and file claims
- Recommend process refinements
EMA Audit Philosophy
As opposed to many of our competitors, EMA is able to provide larger recoveries due to our Stage 2 and 3 integration of an in-depth audit review. Most company software, internal audit teams and outside firms only have the ability to skim past the surface when conducting audits. At EMA, we go beyond standard audits and carry them past common exposures into client-specific and complex exposures. Our structured approach allows us to focus our resources to maximize recovery potential. This is essentially where we recover the bulk of lost funds due to financial leakage. Our goal is to identify and eliminate exposures across all stages of the continuum.
Common Exposures
- Common process errors
- Duplicate payments
- Overpayments
- Captured via basic reporting techniques
- 3-way match
- Duplicate reports
Client-Specific Exposures
- Errors specific to client supply chain and merchandising practices
- Pricing errors
- Under-deductions
- Freight and logistics
- Captured by client-specific audit routines
- Tailored exception reporting techniques
- Vendor compliance to contractual agreement
Complex Exposures
- Highly behavioral or situational errors
- Cultural Practices
- ERP synchronization issues
- Software issues
- Unique transaction issues
- Captured by intensive post audit
- Highly trained expert familiar with supply chain, systems, and process