There is a tradition in several Asian cultures where one must clean house before the new year to get rid of all the bad luck from the previous year. As the last few days tick down on 2015, it’s time to take a look at how you can change the bad luck you had hanging on to your profits in the previous year—and get them back!
What you need is a process. I can share our steps for you to use as a guideline in your efforts. These are the steps we take to recover profits for our clients, and they might work for you, too.
6 Steps to Better Profits in the New Year using our proven system:
Step #1: Do a vendor test. It’s time to examine your vendor file to look for “similar but not the same” entries for names, addresses, tax ID’s, and phone numbers. This will identify potential duplicate vendors in your records, a common way that duplicate payment mistakes are made.
Step #2: Make a double discovery. Using your transaction file data, make two queries to discover what you paid and what you should have paid. When we do this for clients, we use “soft logic” for the first query (Q1), meaning we look at invoice numbers, amounts and dates that are again “similar but not the same.” The second run (Q2), we look using specific criteria to take a harder look. This second query looks at vendor payments, paid credits, invoice number sequences, missed discounts and other criteria. Then we find the matches.
Step #3: Match the clusters. Now that you have the first two steps complete run the vendor test against the Q1 results to match the exceptions and group them. This process is how we prepare our client’s data for the next step.
Step #4: Arrange into Result Sets. Take your clusters and the Q2 results and arrange them all in a spreadsheet. This spreadsheet serves as a basis for the next query.
Step #5: Join your data and recover profits. Query it again and discover where you have lost profits due to duplicates, overpayments, and mistakes. Using software designed for the purpose, the AP Recovery runs the result sets data through our contact management system. From this, we get an on-screen tool that provides the information our analysts need to contact, confirm, and recover overpayments.
Step #6: Fix the problem moving forward. Once recoveries are made, use reports to enhance your Accounts Payable operations moving forward. We provide several reports to our clients so they can adjust their records and systems to prevent lost profits moving forward.
Wouldn’t it be great to change your luck in 2016 and recover some of the bad luck you already had in 2015 (#BigIdeas2016)? This process works to do just that. Of course, it works best with the AP Recovery software, iKnowNow. However, you can learn a lot from the exercise even without our software doing the work for you. And we’re always here to pick it up if you get in over your head.
From duplicate payments to overpayments to inevitable Accounts Payable errors made, it’s possible that you have a lot of bad luck as far as keeping profits where they belong—in your bottom line!
Are you ready to change your luck in 2016?
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Dawson Caldwell is the President and CEO at AP Recovery, the undisputed leader in off-site recovery audits and prevention technologies for disbursement management. Since founding the company in 1994, Dawson put his extensive experience in audit workflow and process management to work on behalf of AP Recovery clients. He admits that nothing excites him more in business than clients with a data-related problem his team can solve for them.
More articles by Dawson.