Forensic Accountants don’t only find evidence of fraud, they often find significant profits leaking from within the organisation.

From time to time when clients have suspected fraudulent activity within a company we have drafted in the services of our forensic accountants to see what they can uncover. The client has spent the majority of their lifetime applying their entrepreneurial skills to build a business which is the engine room of their wealth creation. However with all their efforts focused on securing the next sale whilst trying to maximise the margin and delivering a five star service, they are distraught at the thought of fraudulent activity by their staff eating away at their profits.

I talked with our forensic auditor Paul earlier this week and he told me that in the last year whilst he had uncovered significant fraudulent activity in the businesses he had investigated he also found profits leaking from many different places within large, apparently well managed businesses.

“I know we all believe that we and the people we employ don’t fall foul to human error. We have fail safes as we all use computers to process and make our lives in business so much more accurate. We employ checks and audits and systems to do most everything” He said.

When I questioned him more he gave me the following real examples:

• One company paid the same supplier four times against the same invoice.
• Another missed claiming the correct amount of Input Vat as the invoice didn’t have a Vat number
• Business rates invoices never challenged as it was assumed they were always correct and the correct tax relief had not been requested.
• Missed taxed refund on a capital allowance as the accountant didn’t have a building surveyor qualification to know what was claimable and what was not.
• A missed supplier rebate claim as someone thought it had been delegated to someone else to make the claim
• Suppliers system had issued a credit note but didn’t make good payment that was never checked.

It’s easy to say this wouldn’t happen in my company because my staff don’t miss a thing or our system wouldn’t allow this to happen, but these things do happen
So in carrying out a forensic audit looking for fraudulent behaviour, profit recovery becomes a by-product of the forensic accountant’s activity. The leaks are found, profits are recovered and future leaks stopped which means todays found profits apply next year too. The greater the volume of purchase ledger activity, the more likely leaks are there to be found.

So confident is our forensic auditor Paul that we will recover lost and invisible profits, we are now offering a success based purchase ledger recovery service to companies turning over more than £20m. That is to say our charges are a percentage of monies recovered. If we don’t recover any profits then there is no fee to the client.

If you’d like to have a word with Paul then please get in touch although please be quick. He is very busy!