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August 6, 2018

Accounts Payable Analysis Prescribes $1.5 Million for Pharmaceutical Company

Client Profile

Industry: Pharmaceuticals
Annual Revenue: $473.2 Million
Entity Type: Private Company
Ownership Structure: LLC
Geographic Footprint: National

Pharmacists review data analyticsIssue

A national pharmaceutical company that focused on reducing prescription drug costs for its customers was also looking for internal cost savings. The company was aware of the financial leakage risks that its current accounts payable (AP) function posed, including multiple payment systems and over $1 billion dollars in spend, but it did not have the specialized forensic expertise and resources necessary to address its risks.

Solution

Our data analytics team offered a technology-based solution that allowed the company to use existing data to determine its financial leakage points.

We implemented a data analytics program for existing AP information, analyzing it to reveal patterns. Our proprietary scripts ran 28 unique tests that identified fraudulent payments, overpayments, credit memos, and more. With minimal time spent by the company, we were able to pinpoint and address red flags in real-time. The data analytics program also eliminated the error rate that occurs in traditional audits because the program assessed the entire data population instead of a statistical sample.

Outcome

Within two months of identifying overpayments, the company recovered $1.5 million and established a process for continuous monitoring. Our program helped with future cost saving by providing management with real-time information to review on a consistent basis, and act on if necessary, without the need for formal reporting.

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Copyright © 2018, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

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