Earlier this month, Michael Lamoureux, better known as “the Doctor”, posted two very informative blogs on Sourcing Innovation, focused on the process of statement side recovery benefits. His initial entry, Recovery Audits – Are they Worth It, argues that indeed, with the right technology, the money recovered is significant. He states: “… using technology and analysis, some companies are able to recover an average of 600,000 to 1,000,000 in vendor credits for every 1,000,000,000 in a recovery audit… in some cases, the leaders are able to recover 5,000,000 for every 1,000,000,000, and that’s always worth it no matter how big you are.” These savings expanded even more when the solution provider includes a “SIM-powered” technology, which helps cleanse data and literally clean up problem areas.
His next post, Lavante Recovery – A Risk-Free Way to Segue Into SIM expands the conversation to discuss Lavante’s Recovery Audit solution, which has built-in SIM-type capabilities. And, the article continues to cover how Lavante works to “identify omissions, errors, and inconsistencies in your supplier data.” What I saw as the vision of the two posts is the clear connection Michael makes between clean supplier data (and the ability to keep it updated on a continuous basis) and the ability to drive the maximum recovery effort.
“The benefits of good supplier data and multi-channel reach-out cannot be underestimated where recovery audits are concerned…. With respect to the former, cleaner supplier data makes for more complete transaction data, which not only increases the chance of finding a duplicate, incorrect, or fraudulent transaction — but improves your follow-on spend analysis efforts (and results). As a result of its supplier data cleansing effort, Lavante is typically able to process at least 95% of spend through its recovery audit solution, which maximizes the chances that it will find the majority of your recovery opportunities.”
Our company’s founders, Joe Flynn and Tom Flynn, saw the connections between clean supplier data and maximum recoveries when they built out Lavante’s solution set. Our SaaS-based solution set starts with an automated outreach to the breadth of our client’s suppliers, and then continues to update records through our supplier network database, now with over 2.3 million suppliers. The continuous communication with suppliers results in very high compliance, which keeps our client’s vendor records current, driving the maximum amount of credits possible.
Michael is very astute in his observations and analysis. I have been in supplier management business for 25+ years and very few are able to connect the dots between Supplier Audit Recovery and Spend Analysis. In a future post I will dig further into Doctor’s comments on how Recovery leads to cleaner supplier data resulting in improved spend analysis, which in turn provides better sourcing and more effective supplier management.
If you are interested in this connection of vendor file management and data cleansing processes, as well as statement audit please visit our website. And, click here to read more about Michael Lameraux and his Sourcig Innovation. The two blog postings referenced here can be found at: Recovery Audits – Are they Worth It, Lavante Recovery – A Risk-Free Way to Segue Into SIM .