What to gather before a accounts payable audit
An accounts payable audit asks one question: did you pay the right amount, to the right vendor, once? To answer it, a partner firm needs your payment records and the documents that justified each payment. This guide helps you decide which files to export and which people to involve.
Decide the scope and the period
Agree on a period before you pull data. A longer span finds more, but it also means more files. Choose a period your systems can export cleanly. If you changed accounting systems or merged with another business during that time, flag it now. Data from before the change may sit in a different format.
Also decide whether the review covers all vendors or a subset. If you are not sure, say so on the form. The partner firm can help narrow it.
Export the payment data
The core of the review is a complete payment file. Ask your system administrator for:
- A vendor master list with names, addresses, tax IDs and bank details
- All invoices entered in the period, with invoice numbers, dates and amounts
- All payments made, with check or transfer numbers and dates
- Credit memos, debit memos and unapplied credits
- Voided and reissued payments
Export in a format that keeps the columns intact, such as a spreadsheet or a delimited text file. Avoid PDF reports for bulk data.
Collect the matching documents
Payments should trace back to documents. The standard test is a three-way match: the purchase order, the receiving record and the invoice should agree. Common mismatches include quantity differences, price differences, missing receiving records and wrong vendor details.
Gather, for the invoices a partner firm selects:
- The purchase order
- The goods receipt or proof of service
- The invoice and any approval stamp or workflow record
- Contract terms, if the vendor has a contract
Where a vendor is paid without a purchase order, note it. Those payments need a different kind of evidence, such as an approval email or a budget sign-off.
Describe your controls
A partner firm will ask how invoices flow through your business. Write a one-page description covering:
- Who enters invoices and who approves them
- How you detect a duplicate payment before it is released
- How you handle vendor bank detail changes
- What happens when an invoice has no purchase order
- How credits and refunds are tracked
This is not a test. It tells the firm where to look first.
List what you already suspect
Your AP team knows the awkward vendors. Ask them for a list of items they have flagged, such as invoices paid twice and then refunded, vendors with unusual statements or credit balances that never clear. For each, record the vendor, the approximate date and what was done.
Tip: Vendor statements are useful. If a vendor sends monthly statements, include them. A statement shows the vendor's view of your balance, which can differ from yours.
Contacts and access
Name an internal lead and a backup. Decide who can answer questions about vendor setup, who can explain approval rules and who can export data. If a third party processes your payments, include their contact.
Think about data handling too. Payment files hold bank details and tax identifiers. Ask the partner firm how it wants the files sent and whether secure transfer is available. Fairview keeps form data for 12 months or less.
Checklist before you submit
- Choose the period and the scope.
- Export vendor master, invoice and payment files.
- Export credits, voids and reissued payments.
- Locate purchase orders and receiving records for a sample.
- Write the one-page controls description.
- List known issues.
- Name a lead and a backup.
Where to go next
Read about Accounts payable audit to see what a review covers. Related reading: Common accounts payable errors. When you are ready, use Request a professional. Fairview connects you with a partner firm. The partner firm performs the work, and you stay involved when findings are presented.
Sources
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