In the US, each State has their own variations on Escheatment, which is similar to a lost property law, where ‘unclaimed property’ including credit notes in AR are supposed to be turned over to the state.
This means if you are not on top of all of the credit notes owed to your organization, there is a risk they could be lost forever.
Even when escheatment laws don’t apply, credit notes expire, and it is best practice to regularly audit for credit notes that are owed to your organization.
However for shared services organizations with large and complex supplier bases, this can be a difficult and arduous task.
Some of the options AP have to avoid escheatment and recover money owed the organization include
- Manually reconciling supplier statements which this can be a time consuming task
- Employing an Audit Recovery Firm which will generally need access to your systems to audit and find money owed to you in the form of duplicate payments or credit notes.
- Employing a Vendor Credit Recovery Firm which will contact your suppliers on your behalf to solicit statements and find money and credits owed to you.
- Automating statement reconciliation, using a tool to automate statement reconciliation in-house
To read this article you have to be registered.
Become a member to access all content and / or download it