Analyze transactional data to recover cash

The challenge

Our client, a leader in the Automotive industry, historically  outsourced the order processing of raw materials and the verification of suppliers’ invoices to an external provider. Lack of oversight and changes in the IT system resulted in apparent discrepancies between contractual and actual prices for raw material on invoices, implying excess costs were borne by our client. Management was aware of the situation but however not able to assess the magnitude of the issue nor to precisely claim amounts that should be recovered from suppliers and customers.

Our client asked us to analyze over 70,000 invoices covering 2 years of transactions to identify discrepancies and help recover amounts due from suppliers and customers.

This work required the collection, cleaning, consolidation and analysis of a large amount of datasets from 4 different IT systems regarding invoicing and contractual price evolution for all products manufactured and sold over a 2-year period.

The outcome

We compiled multiple databases and applied advanced data processing techniques to build a data model that estimates contractual prices for each component invoiced based on agreed formulas and prices, and compared this information with actual amounts on customer and supplier invoices.

The first phase of our work consisted in obtaining and compiling transactional-level invoices, price databases, data for components purchased to track inconsistencies in pricing. In a second phase, we analyzed all sales data : transactional-level sales, products sales, sales prices databases.

Our work allowed our client to recover to identify differences between contractual agreements and actual amounts billed and provide the full back-up of amounts claimed, which were largely accepted by customers and suppliers.

Overall our client recovered over 6 million euros thanks to our work which also helped identify and correct significant flaws in the organization and process of their external provider.