An accounts payable audit is an independent review of a company’s accounts payable records. The Accounts payable audit is aimed at checking if the payments are accurate, properly authorized, and made on time, and if transactions are recorded properly. Companies consider experienced business process outsourcing (BPO) service providers or accounts payable audit firms for auditing accounts payable to maintain their AP processes.
Four Stages of Accounts Payable Audit Program
1. Planning for an Accounts Payable Audit
Start by scheduling the Accounts Payable audit. The meeting is scheduled to discuss standard operating procedures (SOPs). The company and the accounts payable auditors establish the goals and parameters to create a precise Accounts Payable audit plan.
2. Record Examination – Fieldwork for Accounts Payable Audit Procedure
The second step of the accounts payable audit program is the fieldwork phase. In this stage, accounts payable auditors dive deep into Accounts Payable records and documentation. Auditors spend several days or weeks to determine if the transaction records are correct using a cut-off test, depending on the company’s size. They look over the company’s financials – Balance sheet, general ledger, purchase orders, vendor or supplier invoices, and other documents.
3. Accounts Payable Audit Reporting
After completing the fieldwork, accounts payable auditors put the findings into a final accounts payable audit report that compiles and analyzes the research. Auditors provide feedback. They highlight guidelines and any immediate issues and concerns.
4. Accounts Payable Audit Follow-up Review
An Accounts Payable audit report is not the end of the accounts payable audit program. Based on the report, there will be a follow-up to determine that the company has resolved the highlighted concerns and achieved satisfactory results.
Accounts Payable audit not only confirms whether the company is following proper processes, but it also helps to know how it can run the business more efficiently. By partnering with trusted accounts payable outsourcing companies as your accounts payable auditors, companies can transform AP processes and resolve concerns highlighted in the audit report to drive efficiency.