Exploring the Future of the Recovery Audit Market: Reading the PRGX and Lavante Tea Leaves [PRO]

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The recovery audit market has a long history that’s rooted, in part, on the fact that accounts payable organizations make mistakes when paying suppliers. These errors often stem from poor visibility into accurate master data surrounding contracts, transactional documents and related supplier information that lead to AP mistakes. Root causes include: overpayments, duplicate payments, currency errors, credit memos, incorrect line-level pricing, missed “deal” memos/notes and logistics charges.

Getting to the bottom of these disparate documents and data sets has traditionally been a largely manual process, albeit one that recovery audit firms have somewhat automated with homegrown tools in the past two decades. Given what they do in the field, providers that serve this market, including PRGX, APEX Analytix and Connolly (now a division of Cotiviti), have historically had more in common with other diagnostic providers such as REL (now part of Hackett Group) than typical operations consultants and procurement/AP solution vendors. But the recovery audit sector is starting to change. Services-based firms are getting into analytics, supplier portal, supplier management and related software areas. And in non-industry-specific and nuanced environments (e.g., retail), solutions from P2P, AP automation and e-invoicing providers such as Ariba, Basware and Coupa are helping to catch payment and other mistakes before they’re made.

This Spend Matters PRO analysis, the third in a series that explores and analyzes PRGX’s acquisition of Lavante, explores the past, present and future of the recovery audit market, and what technology-led changes in it are likely to mean for firms, customers and customers. See also: PRGX to Acquire Lavante: Solution Overview, Comparative Solution Capability and Competitive Analysis (Part 1) and PRGX Acquires Lavante: PRGX Analysis and Customer/Prospect Recommendations (Part 2).

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