Recovering €1.7M and Addressing Process Issues at Their Root

Transforming global procure-to-pay operations isn’t just about addressing the issues you can see—it’s about uncovering the ones you can’t. This was the case for a leading global consumer goods company operating in 60 markets globally. Over the years, they had established centralized shared service centers (SSCs) and implemented robust systems like SAP and JD Edwards, creating a process that appeared seamless on the surface.

But appearances can be deceiving. Recognizing this, the company sought certainty over assumptions. Partnering with Transparent, they embarked on a comprehensive Accounts Payable Audit. Their goal wasn’t just to recover funds—they wanted to uncover inefficiencies, validate their progress, and lay the foundation for even stronger operational performance.

With over 2.3 million invoices and 23,000 suppliers in scope, the scale of the project required both precision and collaboration. Transparent’s proprietary software, Qlarity, allowed us to sift through vast data to flag discrepancies and anomalies. However, the true value came from interpreting the results—understanding not just the “what” but the “why.”

Our Statement Reconciliation Team conducted nearly 7,000 supplier interactions, gathering critical data while our financial analysts cross-verified findings against the client’s ERP system. Together, they identified root causes—ranging from human error to systemic gaps and provided tailored recommendations to prevent future issues.

This process wasn’t just about recovering funds but about creating clarity. Uncovering the root causes behind discrepancies empowered the client to strengthen their processes and improve future performance.

Our audit revealed 86 claims totaling €1.7 million—all of which were successfully recovered and returned to the client. Among these claims, certain patterns stood out for their frequency and financial significance. The largest contributor was unposted credit notes, followed by duplicate payments and unposted bonuses.

These recurring issues provided a clear roadmap for deeper analysis. By focusing on these high-impact claim types, we identified systemic trends and recurring gaps. This allowed the client to go beyond identifying what went wrong, gaining actionable insights into where their processes and controls could be strengthened.

Unposted credit notes were the largest oversight, accounting for €1.2 million of the recoveries. These gaps revealed broader challenges with communication, processes, and data accuracy.

Root causes:

• Suppliers didn’t consistently inform the client when credit notes were issued.
• Credit notes were sent to outdated or incorrect contacts and went unnoticed.
• Discrepancies in invoice details delayed system approvals.
• Manual data entry errors, such as incorrect amounts or dates, caused credit notes to be overlooked.
• Missing standardized protocols meant credit notes weren’t consistently tracked or applied.
• Vendors applied credits to the oldest open invoices instead of following remittance instructions.

Our recommendations:

• Improve communication with suppliers to ensure credit notes are issued and received on time.
• Keep contact information up to date so credit notes are sent to the right people.
• Simplify and speed up the approval process for credit notes in the system.
• Add checks and train teams to reduce data entry mistakes.
• Perform frequent vendor account reconciliations to catch unapplied credit notes.

Despite having advanced systems in place, duplicate payments surfaced as a recurring issue. These payments, caused by processing the same invoice or its reminders multiple times, highlighted both human and system limitations.

Root causes:

• ERP systems like SAP flagged potential duplicates, but alerts were often dismissed too quickly.
• Payment reminders or duplicate copies were mistakenly treated as new invoices.
• In some cases, invoice references were altered, enabling these errors to bypass system controls.

Our recommendations:

• Configure ERP alerts to make them more noticeable and harder to dismiss without proper checks.
• Establish clear protocols for handling invoice copies and reminders, ensuring teams verify whether an invoice has already been processed.
• Avoid alterations to invoice references during processing to maintain system integrity and improve duplicate detection.

Multiple supplier records emerged as a significant contributor to duplicate payments. Variations in vendor names or details created fragmented records, leading to invoices being processed and paid more than once. This issue points to a broader challenge in maintaining clean and consistent supplier data. Without effective management of vendor records, even the most advanced ERP systems struggle to detect duplicates.

Root causes:

• Multiple supplier records were created due to slight variations in vendor details.
• ERP systems, like SAP, were unable to detect duplicates across fragmented entries.
• Inconsistent updates to the vendor master database resulted in outdated or redundant records.

Our recommendations:

• Regularly cleanse and standardize the vendor master database to consolidate duplicate entries and improve accuracy.
• Enhance ERP configurations to better detect duplicates across fragmented supplier records.
• Implement standardized protocols for creating and updating supplier records to avoid fragmentation.

We found that some bonuses were not recorded in the accounts payable system, leading to missed opportunities. Given the effort procurement teams put into negotiating these terms, it’s crucial to ensure bonuses are properly tracked and accounted for.

Root causes:

• Bonuses were sometimes overlooked due to the volume of transactions.
• Suppliers didn’t always communicate bonuses clearly, or the information didn’t reach the right person.
• Data entry errors resulted in bonuses not being recorded accurately.
• A lack of standardized processes for handling bonuses led to inconsistencies in tracking.

Our recommendations:

• Conduct regular contract compliance audits to ensure bonuses are tracked and applied according to terms.
• Improve communication with suppliers to ensure bonus details are reported clearly and reach the appropriate teams.
• Implement standardized protocols for handling bonuses to prevent oversights.
• Regularly update supplier records to reflect organizational changes, such as mergers or acquisitions, that may impact bonus agreements.

No matter how advanced your systems are, technology alone cannot catch every issue—and in some cases, it can even introduce new ones. Gaps and oversights persist, often hidden beneath the surface of tight processes and automated workflows. These challenges underscore the irreplaceable role of human expertise in identifying and addressing root causes.

At Transparent, our Accounts Payable Recovery Audit goes beyond surface-level discrepancies. While technology identifies patterns and flags anomalies, it’s our team of specialists who connect the dots, engage with suppliers, and dig deeper into the “why” behind the issues. This human-led approach uncovers the flaws that technology alone cannot.

Our audits help answer critical questions that every company should consider:

• Are your controls as reliable as they seem?
• How effectively are your automation and matching systems performing?
• Is your vendor data clean and accurate?
• Are your VAT codes error-free?
• How well is your accounts payable department operating?
• Where else can you improve?

By combining the strengths of technology with the precision of expert analysis, we help clients uncover inefficiencies, recover lost value, and build stronger, more resilient processes.