What is a recovery audit?

What it finds, and why that is the problem

Duplicate payments. Invoices paid above the purchase-order rate. Credits that were issued and never applied. Quantities billed beyond what was delivered. All of it real, all of it recoverable, and all of it two years old.

The recovery auditor is not doing anything you could not have done. They are doing it *afterwards*, with a contingency fee, on money that has already left your bank account and gone into someone else’s working capital.

The economics are worse than they look

You pay the fee. You recover a fraction of what leaked, because some of it is unrecoverable — the supplier is gone, the period is closed, the amount is too small to chase. And the money you do get back arrives long after the project it belonged to has closed its accounts, so it lands as a windfall in a period where it means nothing.

Meanwhile the cost report for that project was wrong the entire time. It reflected what was paid. What was paid was wrong.

The alternative is unglamorous and much cheaper

Three-way matching, at cumulative line level, before the payment goes out. It catches the same errors the recovery auditor will find — duplicates, rate drift, quantities beyond delivery — except it catches them while the money is still yours and the supplier is still motivated to resolve it.

If a recovery audit is finding meaningful money in your payments, that is not a success. It is a diagnosis.

Terms

• Recovery Audit