Overview
Since 2017, one of the largest nonprofit academic medical centers in the United States has partnered with apexanalytix to strengthen financial controls within Accounts Payable (AP) while protecting funds that support patient care, medical education, and research. Over the course of the partnership, nearly $17M has been recovered, reinforcing the value of independent validation within a complex healthcare environment.
Following an internal review of AP operations, leadership engaged apexanalytix to conduct an independent recovery audit to validate processes, uncover overpayments, and address systemic breakdowns across billions in supplier spend. What began as a recovery initiative has evolved into an embedded control strategy supporting ongoing financial discipline.
Challenge
The organization maintains a dedicated internal team responsible for reconciling supplier statements, reviewing aged credits, and managing return activity. In a healthcare environment characterized by high invoice volumes and frequent product returns, this function is essential.
However, operational change introduced complexity. ERP updates, OCR adoption, and multiple payment platforms created conditions where certain credits, cross-system duplicates, and communication gaps fell outside standard review processes. The apexanalytix audit served as a complementary control, validating internal efforts while identifying issues tied to specific processes or team members.
Solution
For the 2024 audit period, apexanalytix executed a comprehensive recovery audit across U.S. operations spanning dual ERP environments. The disbursement review examined activity from January 1, 2023 through September 20, 2024, analyzing 500,000 invoices and $3.8B in auditable expenditures. In addition, apexanalytix conducted supplier statement reviews across 1,200 suppliers, with a focused analysis of 90-day aged credits to capture unapplied returns, duplicate payments, and outstanding credits.
Auditors worked directly within the organization’s ERP systems to independently review invoices and credit memos, reducing internal workload while accelerating recovery validation.
Change can break down AP processes and procedures. A recovery audit is always a good way to check what has changed.”
Associate Director, Accounts Payable
Results
The 2024 audit resulted in $2.5M recovered across 500 claims — nearly 100 more claims than the prior period and a $750K year-over-year increase, representing a 28% lift in recovery dollars. Three suppliers accounted for 32% of total recovery dollars, highlighting concentrated supplier risk.
The audit did more than recover money. It showed clear gaps in controls, including return credits applied late, cancelled services not reported to AP, duplicate payments across two ERPs, inconsistent invoice coding, and rebates that were not tracked. These findings led to focused process improvements and stronger accountability across teams.
Top 6 Root Causes for Overpayment Recoveries
1. Returns
Example: When goods returned to the supplier for which a credit was not properly communicated to Accounts Payable.
Recommendation: Strengthen communication between operations and AP so returns are shared immediately and require suppliers to issue credit memos promptly for all returned items.
2. Cancelled Invoice, Contract or Service
Example: Unprocessed credits often occur when lines of business do not communicate cancellations or changes quickly, even though they typically know about these adjustments first.
Recommendation: Process or accrue expected credits as soon as they are identified and reduce blanket POs by adjusting available PO funds when changes occur.
3. Different Payment Systems
Example: When duplicate payments are processed using multiple payable systems.
Recommendation: Standardize payment processes across systems and regularly reconcile transactions between them to catch duplicates before payment is issued.
4. Inconsistent invoice coding
Example: Invoices are coded incorrectly or differently than expected, which can cause them to be routed, recorded, or paid incorrectly.
Recommendation: Be consistent through clearer processes, better personnel training, and stronger system checks.
5. Duplicate Payments
Example: Duplicate payments identified through the supplier statement review process that are either undetectable in the data or fall outside of the range reviewed in the disbursement review.
Recommendation: Review more supplier statements regularly and improve data reconciliation so duplicates missed in normal reviews can be identified sooner.
6. Rebates
Example: The company earned rebates based on spend or volume, but the associated credits were not issued or captured.
Recommendation: Track rebate-eligible purchases centrally, document rebate terms in supplier contracts, and create periodic reviews to ensure earned rebates are invoiced and applied.
Conclusion
For this leading academic medical center, recovery audits have evolved into a strategic financial control rather than a one-time corrective exercise. Since 2017, the partnership has delivered nearly $17M in recoveries while providing sustained visibility into AP risk.
Rather than replacing internal reconciliation, the audit enhanced it — equipping leadership with data-driven insights to strengthen accountability, improve cross-functional communication, and refine process ownership. Independent validation combined with actionable root cause analysis has transformed audit findings into measurable, lasting control improvements.
