How AP Automation Helps Organizations Handle the Audit Process

How AP Automation Helps Organizations Handle the Audit Process

Regardless if they’re public or private, many companies are subject to an audit at least once a year. In general, most audits involve reviewing the accuracy of financial statements and disclosures to ensure compliance and prevent fraud.

There are many reasons a company may be audited. For example, companies with state or federal contracts undergo audits to ensure they are meeting contract terms. Governmental and tax-exempt entities get audited to determine if funding is being spent efficiently and that they are not jeopardizing their tax-exempt status. Some companies choose to initiate an audit as a way to improve internal processes. Depending on the scope, it can be a long and stressful process for any finance professional.

But the more organized a company is, the smoother the audit will go. If you’re looking to enhance your audit procedures, AP automation is a wise investment. With its robust technology and adaptable integration capabilities, Paypool AP automation can make your next audit easier to handle.

Five Ways Paypool Makes Audits Easier for Organizations

AP automation makes audits less complicated and arduous in several ways:

1. Providing Centralized, Accessible Storage

Paypool AP automation keeps all AP and transaction documentation in one location. This greatly reduces the chance of losing information because of outdated manual or paper-based methods. Auditors can also search and retrieve proper documentation seamlessly.

2. Maintaining Accurate, Conclusive Data

Audits involve a lot of information requests, and a company needs to be able to produce proper documentation to ensure efficiency. For example, account balances, cash flow, income statements, and tax returns may all be requested. In addition, auditors will look to confirm that each purchase connects to a vendor with an invoice or a receipt that validates the goods or services were received or rendered.

Paypool AP automation stores these figures and removes duplicates, keeping information up to date. Depending on the size of the organization, it can be frustrating to dig up mounds of paper noting each service expense — especially if you maintain separate AP and accounting workflows. Paypool provides auditors with reliable data, reducing the likelihood of major discrepancies.

3. Helping Prevent Fraud

According to the Association of Certified Fraud Examiners’ 2020 Report to the Nations, the U.S. leads the way in occupational fraud cases, largely originating from corruption and billing schemes. In fact, 46 percent of the world’s occupational fraud cases originated from the U.S. and Canada.

Internal audits play a major role in detecting these fraudulent acts. It is imperative that an organization has a solid system in place to assist in mitigating the chances of fraud. Paypool AP automation helps reduce the likelihood of fraud because of its technological capabilities in four major areas:

  • It offers custom workflows based on your organization’s procedures. For example, if an invoice is above a certain threshold, it will trigger a special approver workflow.
  • The software assigns a time stamp and name for every action that is taken on an invoice or payment in the system, whether one is uploading, approving or coding an invoice or authorizing a payment. In turn, this creates a digital audit trail so no one can take an action that can’t be reviewed.
  • Two-factor authentication can be enabled at a user level or even required for all users.
  • Check images, ACH transaction data and payment remittance data are captured and stored for future reference.

When information isn’t being tracked accurately, it’s easier to manipulate a company’s finances and take advantage of a disorderly system. With Paypool AP automation, you can go into an audit confidently knowing you’re far less likely to receive a ‘red flag’ from an auditor.

4. Keeping Companies Compliant

Automation ensures that an AP department stays compliant with its own procedures, such as invoice processing and payment, as well as those of its vendors. This minimizes noncompliant invoice issues.

5. Saving Time & Money

According to the Accounting Firms Tax Season 2020 Survey Report, private companies averaged 2,927 audit hours at an estimated cost of $179 per hour. Not-for-profits averaged 935 audit hours at an estimated $149 per hour.

Paypool can drastically slash audit time because you can grant auditors immediate access to the information. With a few simple clicks, an auditor can generate complete AP reports or pull up transaction-level details by searching the vendor or invoice number.

Become Audit Ready with Paypool

If audits have been an overwhelming ordeal in the past, they’ll be easier to embrace if you adopt an AP automation solution. Be ready to tackle your next audit with Paypool AP automation. You’ll be better prepared and will save time and money by adopting a more advanced process.

Are you prepared for your next audit? Paypool AP automation and integration capabilities can help. Request a demo today and learn why thousands of companies have trusted Paypool with their AP needs.

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