Do suppliers always return overpayments?

Overpayments refunded?

Rockford Associates recently held its annual recovery seminar at the Laura Ashley Hotel, The Manor - Elstree.

One topic on the agenda and a question often asked by clients before an Accounts Payable Audit is do suppliers always return overpayments.

Generally the bigger the company the less likely overpayments will be notified or repaid, there are usually too many administrative procedures to go through and journals to clear outstanding balances can be common place.

However, on the whole the Audit Practitioners concluded suppliers do indeed return overpaid monies once Rockford has identified and verified an overpayment has occurred. That said, it is evident the return of overpayments is not always high on a suppliers list of priorities.

 

Identifying Overpayments

Outside the identification and verification of overpayments, the Accounts Payable recovery process can rapidly exhaust the productive working time of an already overstretched AP team, hence the need for recovery audit specialists like Rockford Associates who provide a professional Accounts Payable recovery solution to mitigate such risks by working on a contingency fee basis.

Amongst the Practitioners present it found there were no significant differentials in the return of supplier overpayments for all sectors served including Commercial Businesses, Charities, NHS Trusts, Housing Associations, Local Government or Further Education Establishments.

We felt it would be good to share with our Clients a few “real world” extracts of some of the responses Rockford Audit Practitioners encounter when trying to recover AP overpayments that have been made to suppliers:

• “When we don’t get remittances; unknown cash goes straight into our SUSPENSE account”

• “Have spoken to our accounts and "I'm hoping to discuss the duplicate payment from Four (4) years ago (invoice 1234). My accounts for that financial year were fully consolidated. However, as a gesture of goodwill I would be happy to reimburse some of the overpayment which you brought to our attention, if that's agreeable to you."

• “We have changed banks and are awaiting a cheque book”

• “The other 1,872.00 from the payment from April 2015 it is now re-instated on the account as unapplied amount. We had to remove it from the account back on September 2015 as we had year-end”

• “The remainder of the £1,427.63 overpayment (£426.66) was written off due to the age of the credit balance”

The list of reasons for not returning overpayments made to suppliers keeps on growing and the need for an independent Accounts Payable Audit has not diminished. Please don’t wait for your Suppliers to change their last cheque book.

For some expert help in identifying areas where your suppliers may be misreporting figures or contributing to overpayments contact Rockford Associates for a confidential and no obligation initial consultation.