Statement Audit Has A Bright New Future. Will It Power Your Bottom Line?
For any Global 1000 business dealing with high volumes of suppliers—and their invoices—a robust statement audit capability has become an indispensable tool for recovering over-payments, and correcting invoice errors.
Discounts or rebates not being applied, credits for returned goods or cancelled services not being applied, unallocated payments, pricing errors, incorrect freight allowances—whatever the cause, statement audits routinely generate refunds that can easily total millions of dollars, pounds, or euros.
Traditionally, statement audits have been manually intensive. Audit experts would gather payment data, contact a subset of suppliers, manually reconcile payment details against supplier statements, and then book any identified credits. It all adds up to a time‑consuming process that can take many months and leave some accounts unexamined.
Twenty years ago, APEX Analytix’s global duplicate payment prevention software solution, FirstStrikeTM was painted as a disrupter to the recovery audit industry, launched despite the objections of the industry. More recently, this commitment to innovative audit technology was extended to statement audits, with the development of our Supplier Statement Audit module as part of the APEX Portal solution suite.
But just as the application of technology served to disrupt and replace traditional manual recovery audit approaches, the very latest technology advances are now being applied to disrupt and replace conventional technology-based approaches to statement audit. In particular, technologies such as cognitive computing, artificial intelligence, machine learning, robotic process automation, and predictive analytics are transforming the art of the possible. Here, we are looking at how these technologies can, and have, altered statement recovery audit.
For example, proprietary predictive analytics capabilities use sophisticated algorithms to develop ‘claim likelihood’ scores that focuses the recovery process first on those suppliers with the highest potential of having an outstanding credit that can be recovered. Micro‑targeting then provides automated engagement tools for all suppliers to trigger outbound statement request email campaigns or phone messages, automatically populating statement requests with addresses and phone numbers, and provide real-time workflow tracking. And artificial intelligence illuminates the root causes behind statement errors, drilling down to determine why mistakes happen, and how you—and your suppliers—can take action to prevent such errors happening in future.
Here at APEX Analytix, for instance, the latest release of the Supplier Statement Audit module in the APEX Portal Suite, powered by our APEX ArchimedesTM platform which leverages both IBM’s Watson artificial intelligence and analytics capabilities as well as our SmartVM database of over 20 million accuracy‑scored suppliers, bringing unparalleled intelligence and responsiveness to the statement audit process.
One result is that statement audit capabilities are now simply more effective. They’re faster and more accurate, and they generate more recoveries. Instead of undertaking them once a year, or once a quarter, it’s now possible to undertake a continuous statement audit. That’s a huge advance on what was state of the art just a handful of years ago, and underscores the pace of change in technology.
And as an illustration of what that equates to in dollars and cents, consider Canadian communications and media company Rogers Communications, a business with annual revenues of $14bn, and which processes over 1.7 million invoices annually. With a previous statement audit provider, recoveries were running at $600,000—but moving to APEX Analytix and our new-technology Supplier Statement Audit capabilities, recoveries reached $2 million on the very first audit.
But more than being faster, more efficient, and more effective, statement audits powered by new technology can for the first time be both continuous and touchless, enabling customers to conduct their own statement audits at will, on demand. That’s right: statement audit as an in-house function, carried out as often as desired, highly automated and efficient, yet leveraging the power of a trusted statement audit provider in terms of expert database and contact centre capabilities.
Internalising the statement audit function in this way delivers a double benefit. First, audits carried out on a frequent ongoing basis catch outstanding credits sooner, improving cash flow and making it easier for the root causes of errors to be trapped and dealt with while memories are still fresh. Second, internalising the statement audit function means eliminating paying third-party recovery audit providers.
“Using the most advanced technology in recovery audit has the potential to not only increase recoveries, but automate and personalize much of a once labor-intensive process,” says Steve Yurko, CEO at APEX Analytix. “Technology that harnesses robotic process automation, predictive analytics and micro-targeting will allow organizations to internalize their statement recovery audit, streamlining the process and reducing the costs, and ultimately, leading to increased and more frequent recoveries.”
In short, it’s the best of both worlds—while also achieving a calibre of statement audit that is vastly superior to anything that has gone before, and which recovers more outstanding credits, more quickly, and with greater insight into why such credits arose in the first place.
Is this the future of statement audits? We think so.