The practice of performing recovery audits originated in the
early 1970's, during a time of increased commerce for the
retail industry. A growing network of national chain stores led to a rise in competition for shelf space from suppliers of
all regions and revenues. Large companies had a difficult time
keeping track of the many different vendor price points,
rebates, and other various discounts. Keeping track of such
details was not an integral part of purchasing departments and
oversights led to a substantial amount of lost revenue going
unnoticed.
Sensing
the budding market, financial minds went quickly to work
selling their services to accounts payable departments in
companies all over the country. Even in its earliest stage of
flipping through volumes of hard copy invoices, the recovery
audit industry proved a vital addition to any accounting
department. The tedious work discovered significant amounts of
otherwise lost profits through unapplied credits, payment
errors, and other clerical mistakes.
The
industry now finds itself expanding in scope and technology.
Most analysts agree that even with the advanced technology
available today, clerical errors still cannot be avoided, but
great strides can be made toward correcting and containing
them. Recovery auditing firms should look toward such tools as
the internet and state of the art software programs that allow
real time communication between themselves and the clients
they represent. Corporations employing such services, and
granting access to confidential financial records should
expect nothing less.
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