Continuous Monitoring & Supply Chain Transparency

Case Summary

A global automative company was looking for a continuous monitoring program with automated audit capabilities to improve their supply chain transparency.
Focus on Vendor 360 Procure-to-Pay and Employee 360 Travel and Expense platforms.

Identified over $16 million in working capital improvements and cost recoveries, since 2022.

Identified over $800k in early payment discounts that were previously missed!

Challenge

A Fortune 500 automotive company with world-wide supply of systems and components was looking to improve its supply chain transparency into their procure-to-pay (Vendor) process. In addition, they wanted to automate certain continuous audit controls, with a specific focus on contract compliance, working capital improvement, and cost savings.

Solution

A monthly monitoring program was put in place using konaAI’s Vendor 360 and Employee 360 platforms. On a quarterly basis, the entire procure-to-pay module was processed out of SAP through a library of over 100 supply chain tests.

Working with the Chief Audit Executive and internal audit, konaAI monitored third party payments and employee travel & entertainment expenses. Several unit-price and transaction tests were customized in line with vendor contracts and company policies to assist with monitoring three-way-match tests, contract compliance and unit price analysis.

Examples of some tests conducted:

Unit pricing variance analysis

To identify multiple pricing discrepancies across the same vendor on same product/material

Payment terms discrepancy

To identify inconsistent payment terms across vendors

Results

Since 2022, the company has identified over $16 million in working capital improvements and cost recoveries along with over $800k in early payment discounts that were previously missed.

konaAI’s internal audit and continuous monitoring helped identify several instances of fraud and abuse such as:

Same vendor being paid in less than ten days, when the payment terms were 60 days
Rogue T&E spend in Asia which led to several employees either being fired or reprimanded
Several out-of-policy violations which were quickly remediated

Over the years konaAI has supported multiple internal investigations and is now a part of the company’s effective fraud risk management.

Fraud Risk + Cost Recovery Algorithms around Vendors and Employees

Internal Audit Buyer as part of their SOX Controls

Sahil sharma