THE TRUE COST OF NEGLECTING UNFORESEEN ERRORS TODAY
Local authorities are collectively facing a funding shortfall of more than £3.5bn in the coming year, according to a new report by the trade union UNISON. A recent BBC Article also stated Councils in England are in a state of financial crisis with many facing effective bankruptcy in the next few years.
This issue is becoming very public. Media commentary is awash with statements like “Councils are on their knees”, “They’ve wasted money
all over the place, on frivolous things or things that don’t need doing” “and “they charge us more for everything.”
To those working in Local Authorities Finance and Treasury, this must feel like an avalanche because
scrutiny of tax- payers spends are firmly under the microscope, and cuts or savings to current and future
budgets are running into millions of pounds.
Whilst many try to grapple with saving millions, through cuts to budgets and services they may often, and perhaps understandably, neglect the lucrative unforeseen opportunities that provide the quickest wins, will return money today, and moreover provide savings year after year.
These unforeseen opportunities will not deliver savings of, say, £26.5m in one single sweep. However, they will consistently, and moreover materially, deliver returns to help reduce those bigger deficits.
Unforeseen errors are inevitable and occur everywhere within the Accounts Payable area in both the Private and Public Sector.
How do we know? We find them every day.
Unforeseen Errors
Whilst accuracy rates in Accounts Payable teams across all sectors are high, unforeseen errors will occur and are inevitable, the questions that need to be asked and answered are:
1. What Unforeseen Errors are made?
Mistakes in Accounts Payable Departments are typically unforeseen and sometimes require a fresh set of eyes to reveal exceptions, such as:
Goods or services being paid for twice
Payments made to the wrong supplier
Payments made in the wrong currency
By-passing of existing software duplicate checks
Same invoice being paid across different Accounts Payable systems
Credit notes being paid as invoices
Unclaimed or under-claimed UK and International VAT
2. How many unforeseen errors are made?
This varies from organisation to organisation however an Independent Accounts Payable Audit will determine the actual volume of exceptional items for every audit undertaken.
3. Are these unforeseen errors material to your organisation?
The truth is, we don’t know. And you will never know unless you provide an opportunity to find them. The best answer is can you really afford not to look for them!
Once you know unforeseen errors are both commonplace and inevitable, all you need to consider is what do you need to do to find those unforeseen errors and how to minimise their volume, therefore reducing your financial risk and exposure.
“Rockford Associates find needles in haystacks every day; about £1m worth over the last 22 years, but it’s not just about finding them, it’s about understanding why they are there in the first place. Committed Finance Professionals will continually seek Best Practice and full Transparency of Public Spends. Outside monetary returns they clearly understand the positive benefits Independent Reassurance can bring to their organisations” – Ray Dorney, Rockford Associates
How can Rockford Associates help?
1. We will find the unforeseen errors!
Our bespoke Pathfinder software produces in excess of 50 audit reports, each looking to identify overpayments using different criteria and algorithms. It identifies overpayments and errors across data from different entities, countries, divisions, and systems within our client organisations.
2. We will identify how the unforeseen errors occurred
On completion of every audit, we provide each client with a Findings and Recommendations Report, this report details every unforeseen error we unearth and, just as importantly, why the error was made and how your organisation can best remedy them in the future.
3. Rockford will only charge you when we find the needle
Our fees are based around the principle of ‘No Find, No Fee’ which means you only pay a percentage of any recoveries we make and you can engage with us absolutely risk free.
“Making the mistake is not always the biggest problem, they are inevitable. Finding a way to identify the mistakes and rectify them quickly can often be more important.” – Ewan Paterson, Rockford Associates
And it’s not just a service for your AP department. In addition to our Accounts Payable and VAT Recovery Audit service we also provide the following:
Supplier Compliance Audit Programmes
Energy Audits
Telecoms Audits
Statement Reconciliation Services
To find out more and how you would benefit from a risk-free review delivered by Rockford Associates, or if you would like to see some case studies of how we have assisted other organisations across the UK, please click here or see our contact details below.
