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Engie deals with those errors that can never be fully eliminated

Recovery audit

Bastien Meaux

12 February 2021

4 minutes reading time

Engie Belgium uses Runview to conduct expert reviews with the aim of finding any irregularities in its accounts payable and pinpointing areas for improvement. The resulting audits, the latest completed despite the Covid situation, are full of useful information.

“When you log and process 650,000 to 700,000 accounting documents every year, it defies belief to claim they are 100% accurate,” says Juul De Mondt, Process Improvement – Accounts Payable for Engie Belgium. To deal with those errors that can never be fully eliminated, the Group appoints Runview to conduct recovery audits. These are an opportunity to find any irregularities there might be in the accounts payable for some of the Group’s companies.

A globe-spanning specialist in energy transition, Engie has been operating in Belgium for more than 150 years. With 2.6 million consumers, business and local authority customers, it is the market leader in sales of electricity, natural gas and energy services. The Group employs 17,000 people in Belgium, where it is organised into a number of subsidiaries, including Engie Solutions, home to various service companies. These are the entities that were audited by Runview.

Since the merger of the teams tasked with accounting for Engie Belgium’s “services” and “energy” entities in 2018, accounts payable has been centralised in Brussels, in a shared service centre (SSC). Most of the 700,000 documents processed each year, representing some €44 billion, are in electronic format. “The vast majority of invoices arrive by email in PDF format, and are forwarded directly to the OCR system. Others are sent by EDI, and a small minority are still on paper and are scanned by the mailroom before our department takes over,” Juul De Mondt explains.

Juul De Mondt, Process Improvement – Accounts Payable at Engie Belgium

By publicising the findings with our internal customers, we can reassure client companies for which we manage the accounts.


Detecting possible errors in a large volume of entries

With such a large volume of invoices, errors are bound to occur despite the care taken by staff. Juul De Mondt gives an example. “Duplicates can arise if we receive the same invoice via two different routes, such as a PDF and a letter in the post, where the print quality can be poor. All it takes is for the scanning system to see a “0” instead of “O”, or an “I” instead of “1”, and the invoice can be logged twice because the accounting software sees the documents as different.” Given his role in improving internal processes and procedures across the whole Procure-to-Pay chain, one of the objectives of Runview’s involvement is therefore to detect these possible irregularities. “We wanted an external company, with the resources, experience and tried-and-tested methods to find them,” he explains.

The second aspect to the assignment was to examine VAT processing more closely. Here too, the aim was to check there were no errors, or correct them if there were. Lastly, the audits were a means to demonstrate the shared service centre’s performance to internal clients. “By publicising the findings, we can reassure client companies for which we manage the accounts,” says Juul De Mondt.

Runview and Engie have a long-standing business relationship. A framework agreement covering Engie Belgium’s “services” entities has been signed. After a first assignment in 2017, for the financial years 2014 to 2016, a second audit was conducted in 2020 for the years 2017 to 2019. Five companies were audited, making a total of around 1.3 million accounts entries examined, representing some €2.4 billion. Besides overlooked input VAT and supplier overpayments, for this fresh assignment, Runview was appointed to conduct circularisation exercises, in particular to find outstanding credit notes with suppliers. “Some companies make a regular habit of not sending them out,” Juul De Mondt disappointedly points out.


Cross-border audit successfully completed despite the public health crisis

The audit started in April 2020. “Our IT department provided Runview with a database of all the entries written to accounts payable over the previous three years,” Juul De Mont says. The data was analysed by Runview’s consultants using their data-mining and artificial intelligence system to produce an initial list of irregularities, which they then confirmed by examining the corresponding invoices and documentation. After Engie had ratified the irregularities found, Runview was tasked with collecting the money owed from the suppliers in question, in Belgium and elsewhere (Germany, Netherlands and Israel).

The mechanics of the assignment had to be adapted to the pandemic. “Usually, Runview’s consultants travel to examine the documentation. This time, our employees fetched the invoices and sent them on,” Juul De Mondt reports. The audit nonetheless proceeded as planned. “All in all, things went fairly well,” he emphasises.

The circularisation exercise involved 148 suppliers, including some outside Belgium, in Germany and the Netherlands for example. “Although the international side of those of our companies involved in the audit was fairly restricted, there are some foreign companies in their accounts payable,” Juul De Mondt explains. 87% of companies contacted responded.


Informative results showing the effectiveness of the SSC

With a total of €417,000 claimed back, the results of the various investigations proved very reassuring for Engie Belgium. “Our error percentage puts us way below the average,” Juul De Mondt says approvingly. Runview’s report included a comparison with the average outcome across its client portfolio, confirming the quality of the work done by the shared service centre.

“This finding will be shared with the staff, but another objective of such an audit is to draw attention to points to watch,” he reiterates. Useful information emerged from the analyses.

Examination showed for example that the processing of a European document for imports could be a source of errors in terms of VAT. “This accounted for €25,000 of unclaimed VAT. We therefore drew the team leader’s attention to this specific irregularity, so his team could refer to him when this type of document appears in future,” Juul De Mondt explains.

As regards overpayments, which accounted for the majority of the money claimed back, the audit found a few significant duplicates. But the circularisation exercise mainly found unused credit notes. The accounting department is not responsible for errors of this kind. “When suppliers fail to send their credit notes, the onus is on the technical sales department to spot it. We are going to convey this information when we next meet with our internal customers,” Juul De Mondt points out. As it happened, many of the credit notes in question were from temporary staff agencies. “They had “forgotten” to send us a number of credit notes,” he says. HR departments handling temporary staff contracts will be asked to monitor credit notes from now on.

Convinced of the benefits delivered by regular audits of this type, Juul De Mondt is very positive overall about the assignments Runview has already completed. He also appreciates Runview consultants’ attentiveness, for example, when he passed on his observations concerning areas where reporting could be improved. “Runview duly noted my comments, and assured me they were working on it,” he emphasises, remarking he had already noted some effort made on the report presented during the final debriefing. Evidence of a shared desire for continuous improvement.

About the author

Bastien Meaux
Bastien Meaux

Directeur marketing

Diplômé de Institut Mines-Télécom Business School (IMT-BS), Bastien a rejoint Runview en 2017 pour créer l’équipe Marketing après plusieurs postes de Responsable Marketing chez des opérateurs télécoms et éditeurs de logiciels.

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