Accounts are simple in theory, but all too often extremely complicated in practice. Thanks to that unwanted but unavoidable fact, your business could be losing surprisingly high amounts of money through duplicate payments and other sorts of accounting mistake. An accounts payable audit can enable you to find these, thereby saving money that you have already wasted and preventing the same thing from happening again. You may be under the impression that your company is already as smoothly-run as it needs to be in this area – or perhaps you merely think that these sorts of errors are unavoidable, and the price of doing business. However, this is not true, as recovery audit software will prove. The most reliable estimates suggest that somewhere between 1 in every 1,000 and one in every 200 payments is a duplicate – which means that between you are maybe overpaying between 0.1 percent and 0.5 percent in just those cases. That has a high cost associated.

That’s only one example of accidental overpayments. There are an awful lot of others – not least when devious suppliers intend to take advantage of the faults in your accounting system and end up costing you money through basic fraud. It’s not nice to consider, but it’s something you should bear in mind: if you haven’t, then there always the chance that someone else has – all with a cost to your company. In this economic climate, no one should be throwing money away like that.

All in all, overpayments are an expensive business. An accounts payable audit of the last few years for a medium-sized business could easily show a six-figure discrepancy – money that could have been used to pay staff or invest in hardware or training. Duplicate payments occur because accounts systems often only have relatively basic safeguards in place, and mistakes (and dishonesty) do occur. A typical accounts payment will require a dozen different pieces of information to be entered into the database – plenty of room for human error. recovery audit software can eliminate most of these. In fact, it would be surprising if the software didn’t more than pay for itself the first time it was used. Moreover, it’s worth acting fast. Duplicates and other mistaken payments can be corrected – but only if the supplier involved is still in business. If you wait around for too long, you may find that more and more of them are no longer operating, meaning that you have no chance of reclaiming the lost funds.

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There’s a rule that firms that start in a recession tend to be leaner and tougher than those which get going in happier times. The same is roughly true, though to a lesser degree, of businesses that survive a recession. Some make it because they slim down and make every pound count; others only because they have cash to rely on and not because their model is viable. Either way, a recession is a good time to make sure that waste is at a minimum and you are making the most of every opportunity. That goes for your accounts as well as advertising and product design or service provision. An accounts payable audit can show up where you have been going wrong for possibly years, without realising it – those areas such as duplicate payments where you have been throwing money away, only because your accounts processes aren’t up to the job of locating where errors and fraud are most likely to occur. Thus recovery audit software can have two helpful purposes: it can enable you to demand back money lost in past overpayments, and it can help protect you from making the same mistakes again in the future.

When a company starts out, its accounts might be fairly simple. A rather limited number of suppliers and clients (perhaps just one of each), and small, predictable outgoings. That’s easy enough to keep track of, but when your business increases you might find yourself adding new clients and complexity to a system that was never intended to keep up with it. That becomes time-consuming to administrate, for starters. Sadly, it also becomes vulnerable to errors, and even dishonesty. Even a single invoice itself is quite complex, with maybe a dozen different fields of data. The scope for mistakes is large, and multiplies with the number of clients you have. Plus, some will always be unscrupulous and willing to see whether they can take advantage of your system’s inadequacies by sending duplicate invoices.

Duplicate payments are the single largest category of overpayment, but there are many others. That’s why recovery audit software is so vital: it enables you to find exactly where the errors are creeping in, and to plug the gaps. Given that an estimated 0.1 percent of payments are spurious, an accounts payable audit can save a lot of money – especially if your business works on high numbers of transactions. In fact, it can make all the difference between going under and staying afloat – and will stand you in good stead for when the economic climate brightens.

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Using bacs software for all your business’s financial transactions conveys greater reliability to your operations, a more even cashflow and makes instant cost savings on paraphernalia such as cheque stationary and postage costs. Bacs can be used to pay wages and salaries, for supplier payments, refunds, pensions, dividends, employee expenses and insurance settlements, covering every expenditure needs of any size of organisation. What is more, bacs payments profit both payer and payee.
For the payer, bacs cuts down on administration costs and time spent banking. Sorting, preparing and collating cheques is a time-consuming task, not to mention meeting relevant remittance advice – whereas using bacs to create and authorise a payment is simple and inexpensive. Bacs payments also give the payer greater command over cashflow management, so that the payer always knows exactly when the payment leaves their account. Thanks to this constantly up-to-date information, you can make your money work for you right up until the moment it leaves your account.

By generating only a single debit from your account on a specified date, the need to track individual payments is eliminated. As well as cutting down on reconciliation, bacs payments augment efficiency and put you, the payer, in the position of being able to agree more favourable payment terms.
As a payee, bacs software makes your life much less complicated. Organisations that pay using this system tend to pay earlier than those who do not use bacs. They also tend to be more dependable, as they rely less on more fallible human handling of payments. On top of being reliable, its is more secure than cheques and cash, which are more liable to go missing.

Like the payer, as a bacs payee you will save time handling and banking cheques and cash – with bacs, the money goes directly into your account electronically. Cashflow is smoother, as payments immediately appear as cleared funds, ready to be withdrawn directly. And all this efficiency means you’ll earn interest earlier, too.

In conclusion, bacs software can really provide you with dependable solutions to sluggish financial transactions, greatly narrowing the margin for error, easing cashflow and saving time. For both payer and payee, bacs payments are faster and smoother, which leads to other benefits, such as negotiating potential and early interest. To make the most effective use of your finance resources, bacs provides a solution and more.

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In the days before bacs, payments were made in several ways – most typically by cheque or cash, once a month. Paying money by cash meant a number of problems, not least the presence of a large amount of money on the premises, and the need for workers to collect their wage packages in person. Cheques were a huge improvement, but still relied on a degree of administration, as well as the vagaries of the mail system. In addition, any problems – a missed signature, a bad date – meant delays. BACS payments avoid all of these problems, and almost all larger businesses nowadays have some form of BACS software to facilitate all the payments they need to deliver – whether to clients, employees or suppliers.

Smaller companies can also benefit from BACS software. Of course, the smallest companies may find it easier just to use online banking; if your company is just one or two people and a very small handful of clients, this may be all that is necessary. Payees can be set up and paid one at a time, as and when invoices come in. However, any degree of growth will soon demonstrate that such an ad hoc system can become unmanageable, if only through the sheer number of contacts and their various types. You might manage to keep track of a dozen payees, but what if that expands to a hundred? Sooner or later, it gets too easy to drop the ball. That’s when you start hearing complaints, and even lost business. Apart from anything else, there are the hours taken to deal with all of the accounts this way – it’s just not an efficient use of time.

BACS software can pay for itself pretty quickly in terms of efficiency and peace of mind. The programmes will integrate BACS payments with your existing accounts system, automating the process and ensuring that you pay people the right amount, on time. Payments are quick (three-day standard, or an expedited same-day payment for an additional fee) and secure, and the bacs setup will provide you with an audit trail so that you can track what is being paid when. Funds can be transferred abroad, too, if you wish, so this is a solution suitable for the international company, of whatever extent. As the alternatives – cash and cheque – become less and less widely used, there are few reasons not to bring this capability to your business too.

Please visit http://www.bottomline.co.uk/ for further information about this topic.

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