In times of downturn, casflow is king.

If you’re a finance or divisional leader, chances are that you’re asking your people to look for cost savings.  Perhaps you’ve already issued or been issued with a mandate to find some aggressive cost savings.  Perhaps you’re at the point where the low hanging fruit is gone and you’re now considering the hard decisions including downsizing and deferring important expenditure. Perhaps the pressure on your CFO and by your CFO is increasing?

The good news is that if you’ve got a large ERP System (SAP, Oracle, Mincom, etc), there is a very good chance that you’re sitting on funds that you’re entitled to.

Find Money FAST is a product which trawls through your data to see if there is money going out the door that shouldn’t be.  Also known as revenue leakage or cost leakage, Find Money FAST can be set up to trawl your systems on a one off or ongoing basis to claw back these funds, finding things like:

• Duplicate payments
• Entitled discounts for paying on time
• Discounts given away which shouldn’t be
• Fraudulent payments

These manifest themselves in different ways.  Often there are a high volume of small transactions which add up to a significant amount.  Sometimes the individual transactions are significant in themselves.

You may think that you have these covered through internal controls, but as the Find Money FAST team always says “controls are good, but the truth is in the transaction.”  Unless you are trawling 100% of your data, you never know if you’ve leaving money on the table.

Some Facts and Figures

• Most companies report a relatively low duplicates payment frequency: between 0.1 and 0.5% of total payments made. [IOMA 2007] But even at this low frequency, duplicate transactions can add up to a loss of $100,000 to $500,000 for every $100 million in payments made.
• Nearly 40% of companies report T&E error rates in excess of 5% of T&E expenditures. [IOMA 2007]
• Just 44% of companies with over 1,000 employees pay most of their invoices within specified discount terms. More than half of companies with over 1000 employees are not taking full advantage of available vendor discount terms. [IOMA 2007].
  Missing a 1% discount on a quarter of your payments can add up to $250,000 cash lost, for every $100 million in payments. On the other hand, paying invoices too quickly places needless pressure on cash resources, and adds to the cost of financing working capital.
• 4.6% of invoices contain errors and 44% of companies pay without original invoices [IOMA 2007]
• The median loss to companies from an employee-vendor conflict of interest scheme is $75,000. [The Association for Certified Fraud Examiners]
• 44% of companies that use purchasing cards report that purchase volume is at least 5% of corporate spend. [IOMA 2007].” 35% of purchasing card fraud is detected through internal and external auditing. You need to audit on an ongoing basis to detect fraud and misuse and nip it in the bud.” [IOMA 2007]
• The average auto write-off tolerance (the difference between payment amount and invoice amount that is accepted without further review) for large companies is $92 per invoice. [IOMA 2008]

Why Find Money FAST?

The Find Money FAST team has over 500 analytics which can be set up quickly to cover all different possibilities. While a lot of these are not new ideas, the Find Money FAST team:

• Knows where to look
• Has nearly 500 different transaction tests and hypotheses ready to go
• Has negligible start-up time
• Has a track record of results
• Can trawl 100% of your data without causing business disruption

In short, if there’s money to be found in your AP, AR, GL, HR/Payroll, GST, IT & Telecommunications, AML or Inventory, they’ll help you find it fast, now, and also on an ongoing basis.

For further information, or an obligation-free consultation, please don’t hesitate to contact Todd Davies on 0422 000 913 or info@todddavies.com.au.

Despite internal audit sourcing now being a mature product, we are surprised to find the number of organisations which still struggle to get the right outcome from their sourcing relationship.

Due to popular demand TDA is now offering advice in this area.

For more information, click here.

RSS Feed 

While traditional concepts of mailing lists and newsletters are a tempting way to stay in touch with everyone, we found that they left a lot to be desired and that RSS is a far better way to keep our consituents informed.

By subscribing to our RSS feed your browser or email package will periodically check our site to see if there’s any fresh news and if there is, it automatically download a summary for you.  You can then review this at your leisure without ever worrying about missing anything or losing our newsletters in your inbox or junk mail filter.  (This will also cut down on your email volume – we all need that).

If you’re familiar with RSS, just click on the orange RSS Feed icon on the top right hand side of the website and subscribe to our feed.

If you haven’t used RSS before, it’s very simple.  If you’re using Internet Explorer 7 or above, click on the orange RSS Posts icon and you will see a summary of our latest news.  Click on the “subscribe to feed” link and you’re done.  To check our recent news or latest comments on the site, just click on the favourites icon (the star) and you’ll see 3 options.  Option 2 is RSS feeds.  If there’s something new to read the heading will be black and in bold.  If not, you’re up to date. 

If you’re using a Mac, Safari has similar features.  Just look for the RSS icon in the address window and follow the prompts. 

Email

All too hard?  Just put in your email list and we’ll send you a message everytime we update.

We’d like to wish all of our clients, alliance partners, suppliers and friends all the best for the festive season. Thank you for your support and friendship, have a safe and happy festive season and we look forward to catching up with you in the new year.

Feel free to download the TDA 2008 calendar using this link: Todd Davies & Associates – 2008 calendar. 

Let us know if you need a hard copy for your pin-up board or fridge – we’d be happy to send you a copy.

Photo credit: Jordan Yerman, New York City 2005.

I’m working with a client on getting seed funding to start what I believe to be a very exciting new business, so much so that I’m taking an active involvement in it on an at-risk basis.

This company aims to generate superior capital returns for it’s clients through rehabilitating landscapes and making properties more productive on a sustainable basis.  It embodies a lot of the things I am passionate about – conservation, sustainable development, property investment, a good risk/return ratio and helping people to improve their businesses (in this case, agricultural potential and drought resilience).

This is a small scale offering, so it can only be offered to sophisticated investors and people I know (for more on this, see section s708 of the Corporations Act). If you fit either of these criteria, would like to get in on the ground floor and have some extra risk capital burning a hole in your pocket, please give me a call. We’re hoping to close stage one very quickly.