How many debit notes do you have hidden in your supplier balance?

I was at one of our customers a few years back and the external auditors had finished doing all their work, everything was good, with no major findings. And then the head of internal audit decided to do some data analytics on supplier debit notes. He had noticed that no one was actually tracking supplier debit notes in the company.

During his check, he found some really juicy supplier debit notes, that were outstanding for over 3 years. Some of them worth 10% of the purchasing from those major suppliers.

When that audit manager then tried to convince his other audit colleagues that it would be a good idea to include data analytics for checking supplier debit notes, they didn’t get it. They said we don’t need to do that because we have the detailed supplier balance and we can see that all the supplier balances are negative.

But what they cannot see, is that within that negative balance, lurks some positive transactions.

What if you could see the % of unpaid supplier debit notes hiding within your AP ledger?

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