Recovery audit
A recovery audit is a review of past payments and their supporting records. It looks for money that was overpaid or credits that were never claimed.
The goal is to recover what is owed to you, and often to find the cause so the error does not repeat.
Why a recovery audit matters in a cost review
Everyday controls catch many errors before payment, but not all of them. Invoices arrive through different channels. Vendor records change. Credits get issued and then forgotten. Over time, small gaps add up.
A recovery audit works backward. It starts with what was paid and asks whether it matched what was agreed and what was received. That makes it a natural part of a cost review, because both ask the same question: did the bill match the deal?
A plain-words illustration
Picture a business that buys supplies from many vendors. One vendor sends an invoice by email, then sends a reminder with a new reference, and both get paid. Another vendor issues a credit after a return, but nobody applies it to the next payment. A third raised its price without a signed change, and the higher price was paid for months.
Each error is small and each is easy to miss. A review of the payment history with the contracts and vendor statements brings them to the surface. The business can then ask each vendor for a refund or a credit.
How it shows up in a review
The steps below describe the general shape of such a review. Each partner firm has its own method. [CONFIRM: a partner firm supplies and approves this statement]
- Collect data. Payment records, invoices, contracts and vendor details are gathered. You stay involved.
- Analyze. Records are compared to find possible errors, such as a duplicate payment, a missed credit or a price that differs from the contract.
- Confirm. Possible findings are checked with you and, where needed, with the vendor.
- Present findings. You see what was found and the support for it.
- Agree on next steps. You and the partner decide how to approach the vendor to correct the issue.
- Recover and improve. Refunds or credits are pursued, and causes may be reviewed.
Errors often found in this kind of review include double payments, unapplied credits, pricing that departs from the contract, missed discounts and tax charged in error. Findings depend on your records and your vendors, and no result is guaranteed.
Many recovery audits are paid on a share of what is recovered, but the terms vary. See contingency fee. [CONFIRM: a partner firm supplies and approves its fee model]
The accounts payable audit category covers this work. For an article on limits, read what a recovery audit can and cannot find.
Common mistakes
- Waiting too long. Vendors may limit how far back they will refund. Time limits may apply. [VERIFY: time limits in your contracts and any applicable rules]
- Supplying incomplete records. Gaps in payment history lead to gaps in findings.
- Treating it as a one-time fix. Without changes to the process, the same errors can return.
- Expecting every finding to be paid. Vendors may dispute a claim. Keep support ready.
- Damaging vendor relationships. Agree early on who contacts each vendor and how.
- Ignoring credits. Credits on account can be as valuable as refunds.
- Skipping the baseline. Record your starting terms first.
Note: A recovery audit reviews the past. It does not replace controls such as the three-way match that prevent errors before payment.
Related terms and pages
- Duplicate payment is a frequent finding.
- Three-way match is a control that helps prevent errors.
- Contingency fee describes a common payment model.
- Accounts payable audit is the matching service category.
- The glossary lists more terms.
To ask for a review, use "Request a professional" and choose the form that fits your business.
Sources
Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.Find out what you are overpaying.