Whitepaper

Ace Your Next AuditWith AP AutomationMarch 2019

Surviving an Audit – What’s the secret?Audits are an unavoidable fact of life for many staff, especially if you work in an Accounts Payable department. Between getting your information readily available for auditors, sourcing data from your suppliers, ensuring invoices are verified and approved on time, keeping your staff up-to-date with proceedings, as well as trying to focus on your core business processes, it is enough to give any AP manager sleepless nights. On top of this, the results of these audits can significantly impact a company’s ability to remain competitive and attract new business, so it is critical that they are successful.

The key to increasing your chances of successfully passing an audit and easing the pain for your entire team is to ensure you are well prepared for any auditors and have all your information readily available in a clear and easy-to-access manner. This can be achieved through AP Automation.

Having all your financial documentation hosted on a cloud-based platform where particular invoices requested by auditors can be found at a moment’s notice will significantly save your company both time and effort and provide a level of comfort to your auditors that your record keeping is up to standard. Should any issues appear in relation to a particular transaction during an audit, AP Automation provides an automatic audit trail of everydocument that goes through its system, allowing you to source the root of the problem quickly and easily, allowing for a swift resolution.

This whitepaper will look at how AP Automation can help your business pass its next audit with flying colours, as well as highlighting the key benefits it will bring to your AP department.

Challenges with Traditional AuditsWhile the conduction of audits may vary, depending on the size of the company, the volume of documents processed or the nature of the business, they will often encounter the same number of challenges should the company be ill-prepared.

Time-Consuming

Audits can often take a considerable amount of time to complete, made even longer when auditors only have physical documents to trawl through. Locating the files in lever arch folders, finding the relevant information and then reviewing it can a be time-consuming exercise for all involved, time which could be spent on more valuable tasks for the business.

Audits are often priced by the length of time they take to be completed too, so it is in the businesses best interest to have them completed in a timely manner.

No Control

The issue with paper-based AP departments is that they can be incredibly difficult to manage. Paper or PDF invoices can be misplaced, damaged or lost entirely, making it an AP manager and auditor’s nightmare.

These management challenges mean that the auditors, and subsequently the AP depart-ment, have very little control of their documents, this means poor visibility of the creditor pipeline and an inaccurate view of the company finances.

Invoices may get stuck in the approval process and delayed approvals often result in duplicate invoices being submitted by frustrated suppliers.

Manual Entry = Human Errors

Companies who still operate using a manual invoice processing system run a much higher risk of falling victim to avoidable human errors caused by manual data entry. Whether it be illegible handwriting, incorrect information inputted or just the length of time it takes for individuals to process the invoices, any one of these can cause delay and make life difficult for auditors. Now, with Making Tax Digital a live UK Government initiative, reduction of entry errors is even more critical to ensure that correct digital records are provided to support tax returns.

Difficult to Detect Fraud

AP departments are vulnerable to fraud due to the large volume of transactions they deal with on a regular basis. Without proper controls in place, employees are free to make any changes they wish to the information on the paper files or approve invoices by themselves.

Whilst the majority of employees will work in good faith, there is always the risk of rogue employees who will look to benefit themselves at the expense of the company. Should any unusual activity appear during an audit, it will be difficult to identify where the inappropriate activity transpired, and the company will be held accountable for it.

Not Real-Time Information

With manual invoice processing it is very difficult to get an accurate, up-to-date overview of the process at any one moment in time. With paper and digital invoices on people’s desks and on desktops, the AP manager and auditors may find it difficult to achieve a clear view of the outstanding liabilities across the entire AP process. As a result, accruals can be hard to account for, invoices’ status may not be easily determined, and the reasons why they may not be paid, part-paid or in dispute may not be recorded.

How AP Automation can revolutionise your next Audit The traditional way of conducting audits can be a pain for all parties involved. AP departments are left stressed as they rush to get everything in order and auditors are left frustrated by the lack of control in place. However, it doesn’t have to be this way anymore. By automating your AP department, you can streamline the entire process, bringing benefits to both your own staff as well as the auditors.

With an automated accounts payable system, invoices can be processed within minutes of arriving, no matter how they have been designed or how they’ve been sent. They can be either emailed or scanned directly into the system where their data will then be extracted and sent to an automated workflow for coding and approval or purchase order matching. Duplicates are eliminated, access is controlled and all documents are stored in a single location. Invoices can then be instantly retrieved by authorised users at any time.

Not only does AP Automation simplify the day-to-day lives of your AP department and vendors, it will also benefit your company hugely when faced with an audit.

9 Ways AP Automation Will Help You Ace Your Audit

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Preparation Streamline Compliance

InstantAccess

Visibility & Control

Elimination of Lost Files

Fraud Mitigation

CentralisedSystem

Time & CostSavings

Elimination of Duplicates

1. Preparation

AP Automation will ensure you are ready and armed with your key information before the audit begins. Panicking over getting your affairs in order before the auditors arrive will be a thing of the past as all the relevant files you need will be readily available to you at the touch of a button complete with the entire document history.

2. Streamline Regulation Compliance

No matter what industry a company works in, or the size of its operation, they will still need to adhere to a set of policies and procedures, both internally and externally. Companies will be required to show in a clear and transparent manner just how exactly they meet these require-ments.

Comprehensive AP Automation software is designed to provide an audit trail of every document it holds in the system, tracking each change made. This reduces errors and ensures compliance with tax laws, policies, and industry regulations, which in turn leads to easier audits.

3. Instant Access

While overseeing an audit, auditors may request additional information based on the documents they’re reviewing. When was this new supplier added? Why was this amount paid significantly larger than previous amounts? Who approved this?

In the past, this may have caused a scramble amongst the finance team as they search for the supporting documentation. However, with AP Automation, authorised users can access information quickly and easily, simply by searching for it in the system.

Auditors can be given controlled access to the AP system, only allowing them access to the files they need. This saves them from having to review unnecessary files and ensures the company doesn’t share confidential information.

AP Automation will often be accessible across a range of devices such as smartphones, laptops or tablets, meaning you can process and approve your invoices wherever you are. Hosting everything online will also reduce your company’s reliance on paper, freeing up space in your office.

4. Improved Visibility & Control

While a paper-based finance department may have invoices left on desks for days or weeks on end before being processed, AP Automation ensures invoices are uploaded and processed straightaway. This allows AP staff and auditors complete and instant visibility to the finance records and pipeline. This increased visibility has proven to drive accountability, accuracy and provide greater control on the accounts payable process.

AP Automation also generates real-time reports for each stage of the accounts payable process, giving users fast, clear and accurate information, allowing them to answer queries quickly and easily.

5. Eliminates The Risk Of Lost Documents

No longer will you need to spend hours of your week searching for documents that have been lost or misplaced. With AP Automation, you just need to search for the document you want, and it will appear instantly, along with key information such as who accessed it last and have any changes been made to the original. An auditor’s dream!

6. Mitigates The Risk Of Fraud

With AP Automation, a number of internal controls can be implemented in order to reduce fraud. These include segregation of duties, dual approvals, and two-factor authentication. This can help reduce both employee fraud and supplier fraud.

Now that every movement of a document is tracked and recorded, employees will think twice about attempting something they shouldn’t. Should any fraudulent activity be detected during an audit, AP Automation ensures that the source of the issue can be found quickly and resolved efficiently.

Segregation of duties or dual approvals will ensure that the invoice approver won’t be the same as the payment approver, a common source of fraud.

Two-factor authentication adds an extra layer of security for the company, with the approver receiving a text message with a code to approve the invoice.

7. Centralised System

When companies receive several invoices from different suppliers or subcontractors, all using different methods of sending their invoices, things can get sloppy. However, with AP Automation, everyone is accessing the same portal and using the same criteria to submit their invoices. This ensures it is far easier to track where they come from, which is useful for auditors.

8. Time & Cost Savings

Considering many auditors charge on an hourly basis, companies will want their audit to be completed as soon as possible. However, without proper control of your documentation, this will be difficult.

AP Automation will undoubtedly speed up the overall auditing process, as all documents will already be on-hand, ready to be reviewed, eliminating the needless hours spent rummaging through paper documents.

9. Eliminates Duplicates

Duplicates are the bane of any AP staff member’s life. Manually processed invoices could take a long time to process. While it is in the queue to be processed, the supplier may get impatient and resend the same invoice, leaving your AP team with TWO invoices to process. This is unnecessary work that can easily be avoided.

With AP Automation, the system will instantly detect duplicates and eliminate them from the working queue of your team.

Conclusion - Time to Reduce Stress Audits can be painful, time-consuming and can expose serious failures on the business’ behalf if they have failed to prepare.

However, AP Automation will revolutionise the way you manage your invoices andensure you are fully prepared to face anything the auditors throw at you! With instantaccess to key documentation, clear visibility of all your financial records, completehistory of files and up-to-date real-time information of all invoices you hold ensures that AP Automation will help you ace your next audit.

About KefronKefron are The Document and Information Management People.

We simplify the document and information management world for our customers, taking the pain out of your information processing issues. Kefron offers a complete document management lifecycle service. Our business exists to improve how you manage your information, with our expertise supporting both physical document storage and digitisation of your information.

We create workflows and solutions through our expertise which enhance efficiency and ultimately, productivity. We can make a real difference to your business. This is what drives us.

info@kefron.comwww.kefron.com

Kefron International Limited t/a Kefron UKUnit 4A, Woodley Park Estate, Reading Road, Woodley, Berkshire, RG5 3AW, United KingdomPHONE: +44 (0) 118 927 2777

Kefron Limited 53 Park West Road, Dublin 12PHONE: +353 (0) 1 438 0200

info@kefron.comwww.kefron.com