Preparing for an Accounts Payable Audit (And How AP Software Can Streamline the Process)
Accounts payable audit preparation can be time-consuming for even the most well-organized company. When asked to collect specific documentation, your accounting team has to put their day-to-day tasks on the back burner. Meanwhile, you’re still paying your auditor (often by the hour) to sit around wait.
Since the audit process isn’t going away any time soon, it’s better to proactively prepare for them. This way, you’re not losing hundreds of dollars every time your team is asked to provide a particular file.
What You’ll Need to Provide for Your Accounts Payable Audit
Corporate audit preparation becomes easier when you know what your auditor is looking for. On a basic level, they’ll check to see if you’re following appropriate accounting procedures (Generally Accepted Accounting Principles), while also looking for signs of fraud. Auditing ensures that:
- Your Accounts Payable department isn’t issuing duplicate payments
- You’re not paying incorrect or invalid invoices
- You’re not showing signs of wire transfer fraud or fraudulent use of company credit cards
- You’re not managing unrecorded liabilities
- You’re maintaining appropriate accounting records for all your approvals and payments
- Your payees are actually receiving your checks or EDI payments
During your accounts payable audit, you’ll need to provide your auditor with access to invoices, purchase orders, contracts, check requests, and other transactional information. Depending on how your business partners send these records – e.g., as emails or physical hard copies – you may need to collect them from different archives. And it’s rarely possible to know which information you’ll need to provide. Auditing relies on random spot checks, which can complicate preparation. It’s the proverbial “needle in a haystack”.
(For comprehensive corporate audits, you may also need to provide internal statements, equity certificates, check images bank notes, lease agreements, fiscal year budgets, and even your internal accounting procedures manual.)
While assembling all of this information can be a hassle, it’s worth it in the end. A recent study from the Association of Certified Fraud Examiners found that financial statement fraud cost companies – on average – just shy of $1 million – and that the total loss across 2,410 fraud cases topped $6.3 billion.
SOX Audit Requirements
SOX audits are a required oversight measure for all publicly traded companies in the United States. These audits have their own uniqu
e set of requirements.
During a Sarbanes Oxley audit, you’ll need to provide information about your internal security controls. This includes information about your access controls, backup systems, and IT security procedures. Your auditor will check information that pertains to your:
- Network & database activity
- Login activity
- Account & user activity
- Information access history
While routine Accounts Payable audits can be performed by an internal auditor, you’ll need to hire an independent auditor for your SOX audit.
Organizing Your Accounts Payable Documents
If you’re managing your accounts payable documents manually, assembling all of these records can be easier said than done. (This is especially true if you store certain records off-site, or across different corporate locations.) There’s also the chance that a documents gets lost, misplaced, or accidentally destroyed. This can cause a massive issue during an accounts payable audit.
That’s where IntelliChief’s AP automation software can help. As you create & process transactional documents, our system automatically saves it to a secure digital archive. Everything is neatly organized, instantly accessible, and searchable by all identifying information. (For instance, you can pull
up records by date, supplier name or account number, or purchase amount.) You can give your auditor access to your documents from any computer with Internet access. They can retrieve any necessary files or sample transactions with a single click.
During a typical Accounts Payable audit, the preparation phase can take several weeks – as can the fieldwork phase. The exact length depends on the scope of the audit, and the specific procedures that are being following. But with IntelliChief, unnecessary delays are taken out of the equation.
Simplify Accounts Payable Audit Preparation with Electronic AP Records
With our electronic document management system, auditing has never been easier.
During your day-to-day Accounts Payable workflows, our software automatically cross-checks your transactional information with your ERP. This ensures that you’re only paying accurate amounts, on valid invoices, and to the appropriate accounts. Whenever you need an employee’s sign-off on a high-value transaction, our software routes the invoices to the right person, and lets them know the document requires their attention. (You can even build multi-tier approval routes for large transactions that need to be reviewed by several members of your organization.)
IntelliChief also prevents duplicate payments and manual data entry errors. The more transactions you complete, the more likely these issues are – but our AP software takes them out of the picture entirely. This gives you complete peace of mind that your Accounts Payable audit won’t turn up a long list of issues to address.
Not only can you provide a comprehensive paper trail for every transaction that’s ever come through your Accounts Payable department, but you’ll also be in full compliance with the Sarbanes Oxley act – without giving it any extra thought. Because your AP documents are only accessible to users with validated credentials – and because you can redact sensitive information as needed – your corporate financial data has never been more secure. And, you control which users can access which information, and who can complete each workflow – making separation of duties effortless. This puts an end to costly noncompliance penalties.
Accounts Payable Audit Reporting
After your corporate audit is complete, IntelliChief lets you review your auditors’ report from a simple, user-friendly da
shboard. You can then create custom report presentations for your C-Suite, investors, and financial advisors, then share them throughout your organization.
Ready to make your next Accounts Payable audit your easiest one yet? Contact IntelliChief today. We’ll help you develop a comprehensive system for streamlining your financial reviews.