Case Study 3
An energy company with upstream and midstream operations contracted two accounts payable (A/P) audit recovery firms to provide comprehensive recovery audits of its A/P and sales/use taxes. One company identified approximately $80,000 of overpayments due to billing errors and the second company recovered approximately $300,000 in overpaid sales/use taxes.
RSI was asked to take a second pass. Using a suite of proprietary software and intensive manual audit our team of experienced auditors analyzed the client’s A/P payments, policies and processes to uncover not only where, but why, revenues were being lost. Our electronic review included search queries customized to the client’s industry, accounting system and data file format. The manual audit was completed by intensive hands-on examinations of relevant documents. While many A/P audit recovery firms provide only electronic reviews, RSI continues to conduct labor-intensive manual audits because of the significant returns to our clients. Our manual review resulted in the identification and recovery of overpayments not identifiable with data alone, including taxes overpaid to multiple states.
The RSI audit recovered an additional $3 million. In order to minimize future overpayments and reduce overpaid sales tax, we also delivered recommendations and guidance for improvement on the client’s A/P and accounts receivable (A/R) operations. We assisted the client with the completion, delivery and collection of exemption and resale certificates. These measures reduced overpayment of erroneous taxes to key vendors and liabilities due to non-compliance with state laws that require sellers to collect and retain records.