“Most BSM platforms only look at gradation of spend, which can be entirely different depending on how you use the product,” says Brian Barr, CPA, Supply Chain Senior Consultant for cost-recovery leader CPRS. Barr is an oil & gas industry expert who has spent more than 20 years guiding finance and supply chain projects in leading Fortune 100 companies. “Management seems to think they can garner the data needed from financial information rather than transactional information, which I disagree with completely.”

CPRS’s Accounts Payable (AP) Recovery Audit methodologies go beyond top-line invoice information to decompose each invoice into its individual line items. Further, CPRS couples the line-item purchase detail with other metadata to determine whether taxes should be applied to each invoice. CPRS then uses this information to perform Spend Category Coding and Automated Sales and Use Tax Reviews. CPRS can review your purchases to identify taxes charged in error.

“Taxonomy around the coding system, if done right, can allow you to extract data from the system,” Barr continued. “But management’s willingness to use data for its intended purpose, to manage the spend, doesn’t always happen. Many times, the data is used from a financial perspective, rather than a spend perspective. Invoices are aggregated to show financial trends and variances, rather than looking at the actual spend. In fact, most common spend analytics are based on financial or accounting data, which lacks the underlying detail found in the actual invoices. If I’m a business owner, I want to know where my money is being spent.”

If you have implemented a Business Spend Management system, contact the auditing experts at CPRS to see how our 30+ years’ experience and proven methodologies can help your business recover lost profits these systems can miss.