When do you need an audit of accounts payable?

Sometimes life forces people to take out a loan. Large companies and organisations are no different: at times they simply have to become debtors to other companies or individuals. If things go off plan and the debt becomes a pressing issue, an experienced accountant can help resolve it. This guide explains why it is worth using a specialist.

Ways to resolve the problem

Accounts payable arise when goods, work or services are received on one date and paid for on another. Outstanding debt looks bad for a company: its reputation suffers in the eyes of other creditors and investors, and it takes time to recover.

If you believe the debt arose from an error, you will need an audit of accounts payable to clear the company's name and restore investors' confidence in working with you. The audit establishes whether the data in the accounting records is reliable. To do this, the auditor has to:

• check that the contracts were drawn up correctly;
• find out whether the debt was paid down before;
• check that the claims are valid.

In practice, auditors most often come across problems such as incorrectly drafted contracts, cancelled original documents, payables that do not actually exist and errors in bookkeeping. The audit identifies all the errors and either corrects them with the best available solution or fully clears your firm's name if the data was unreliable.

Put simply, the auditor minimises risks, delivers the result you need and spares you the headache you would certainly get trying to sort everything out yourself. Surely that is worth hiring a professional for!