The Strange Case of Vanishing Invoices

Written By: David Hewitt

The Problem

Are you missing some of your vendors’ invoices?  Is your RNI balance growing month after month?

If you’re like most AP departments, you’re probably missing some percentage of your vendor invoices and this slow leak is creating enough Dark Data to lead to millions of dollars in unseen risk and liability that must be resolved.

Most of these items will make their way into your monthly RNI report, but not all of them. An RNI report represents all known transactions that are received by the facility but have no complementary supplier invoice to offset the receipt in your accounting system. Additional to these items, there will also be instances of unseen and unpaid invoices in your supplier’s records. They hold as much risk, and they are equally important to resolve.

Unseen and unpaid indicate risk, liability, and imperfect processes. There are multiple reasons for the occurrence of these balances beyond simply unmatched invoices, purchase orders, and receiving information.

Without corrective action, the problem steadily gets worse due to the ever-growing levels of complexity in your financial suite; your prioritized attention to other compliance matters; and a constant procession of changes facing your AP department.

The Cost of the Problem

The inability to address unpaid vendor invoices whether it is due to a lack of time, access, or visibility can cost you in many ways.

Non-payment of invoices can put you at odds with your suppliers.  This creates unnecessary supplier abrasion, which is both uncomfortable and will at some point, in some way, require your staff’s time and attention to address and resolve. It’s best to get ahead of the issue.

Unpaid suppliers make unproductive partners, and they may also choose to put you on credit hold and potentially shut down a critical supply line.  Just consider the impact of neglecting to pay your staffing provider and coming to work to find one of your facilities experiencing a shortage of qualified nurses, for example.

There is also a major bottom-line implication to this matter.  Failure to see all your invoices means you aren’t paying all your transaction on time.  As a result, you could be missing critical discounts, rebates, volume price breaks, and more.

Finally, without proper visibility into all missing invoices, your RNI report may not be completely accurate and could impact, and call into question, the accuracy of your monthly accruals.

Exploring the Different Ways to Address the Problem

You can dedicate resources to review problem vendors to get to the root cause.  You can also investigate why PO’s are not automatically matching to invoices and receipts, and you can correct those issues in an attempt to avoid them from happening in the future.

You can also perform a manual evaluation of your largest open purchase orders against unmatched receipts.  Assuming you find any connected items, you can associate them together and pay the invoice.

Unfortunately, these types of reviews are quite manual and time-consuming and you may find it is hard to draw associations between the mismatched line items with your internal resources because… remember it was your internal process that missed the match in the first place.

You may choose to go in another direction altogether and write off the RNI items which could provide a temporary solution, but the overall balance will continue to grow, and you won’t gain any root cause insights.  Add to that, your report balance will be inaccurate.

You could choose to bring in an accounting firm but given the typical rates, you will likely see the costs of the project scaling out of control because you are asking these groups to pour over large volumes of data across many different systems.

In our experience, we find that the best solution is to hire a Recovery Audit firm to review the RNI report.  Recovery Audit firms have experience, tools, and aptitude for reviewing enormous sets of data and they have comfort and familiarity with your vendors.  If you do choose to allow a Recovery Audit firm to review your RNI, insist that they are delivering deep root cause analysis as well and best practice suggestions for reducing the problem on an ongoing basis.

Happy AP Appreciation Week to AP Professionals Across the World!

Written By: Tom Flynn, VP of Marketing

We wanted to take this opportunity to acknowledge the Accounts Payable Association, their leader Jamie Radford and his superb team to thank them for hosting and promoting this year’s Accounts Payable Appreciation Week!

It’s important for us to take time to acknowledge the contributions of AP professionals across the globe.  From our vantage at SpendMend, AP is positioned as a critical hub within any organization.  They are situated between many essential groups and are asked to partner with each of these groups on important tasks and workstreams.

AP often reports up to financial leadership in some fashion and in that role, they are tasked with managing and maintaining critical finance goals and controls.  AP must also forge a relationship with sourcing and procurement so the P2P process is seamless.  AP also maintains a large population of employees and are tasked with getting payroll out on time as well as getting expenses paid.  Possibly the largest and most difficult task of an AP department is the onboarding and management of a huge population of suppliers.  In that role AP serves are the final gate keeper on all money before it leaves the organization.
Simply put, AP is asked to do many tasks while interacting with vast arrays of groups and in most of these cases there is zero room for error.  Whenever people refer to AP as the “back office” it is always important for them to understand that “back office” does not mean “background.” It is more accurate to think of the AP “back office” as the “back bone” of an organization because AP is a central pillar in any business.  The last twelve months have demonstrated this reality more than any other time in recent memory.

When global pandemic challenged commerce across the globe, AP departments everywhere rose to the challenge to provide leadership and grit on par with front line healthcare workers. You ensured that bills were paid, that supply chains remained open, and that organizations continued to function under these new adverse conditions.  These were circumstances that most people had never seen before, and for most people, they had never even dreamed of such circumstances.  AP departments everywhere came through in a big way all the while suffering large scale staff reductions and mobilizing their staffs to move out of the office and work from home.

If you are in Accounts Payable in some form or fashion, then please know that this message is absolutely for you.  Thank you for your contributions on a daily, weekly, monthly basis and keep doing the great work that you’re doing. 

An Open Thank You To A Different Kind Of Healthcare Hero

We have heard the brave stories of the doctors, nurses, spiritual advisors, and janitorial staff members standing face-to-face with COVID-19 and its direct impact and we thank them for their courage and efforts, but we also want to thank the unsung and forgotten about members of healthcare.

Thank you to the AP departments for managing the hospital payments and helping keep the vendor relations strong.

Thank you to the finance department for rearranging budgets, managing cash flow and navigating through new complex regulations.

Thank you, Supply Chain, Materials Management, and Procurement for working every avenue to find PPE supplies as well as supplying the hospitals with the normal everyday supplies.

Thank you to the GPO reps for connecting hospitals with suppliers while helping balance required supplies throughout the members.

Many Americans may not know that what you do but we recognize you and appreciate all of your efforts at this time.

We are here to support you and thank you for supporting patient care,


To read more about how SpendMend is addressing COVID-19 click here