Sanef fine-tunes its accounting through Profit Recovery

Sanef holds concessions to operate freeways in France, and the company used Runview’s services to audit its accounts payable, to supplement the in-depth monitoring its team already undertakes. While all the work was done remotely, the assignment ran smoothly, and confirmed the excellence of Sanef’s internal processes, something the accounting teams and their line management were pleased to see.

“It’s always helpful to get an outside expert view of your processes,” Pascal Vély, Audit and Procedures Manager in Sanef’s Finance Department, points out. This indicates Sanef’s mindset in wanting to appoint Runview to run a Profit Recovery exercise on its accounts payable. It had great confidence in the quality of its processes, but it was also keen to grasp any opportunity for improvement.

Sanef holds concessions to operate around 1,100 miles of freeway, mainly in northern and north-eastern France (from Normandy to the German border). Its aggregate revenue is around €1.8 billion, and it employs 1,800 staff.

Accounting is handled in-house, by the accounting-consolidation section of the Finance Department. A team of around twenty is split between various processes, including accounts receivable, general ledger, tax & payroll, accounts payable, assets & stocks, and consolidation & audit. Most of the accounting runs on an SAP system.

Good tracking of accounts payable internally

Sanef has approximately 2,700 active suppliers and on average handles 35,000 invoices a year. The accounts payable team has a KPI dashboard and pays close attention to business. “We have been working hard for several years now to improve our tracking of accounts payable. One individual is tasked with checking the balances of supplier accounts, especially debit balances,” Pascal Vély says.

When Sanef was contacted by Runview to run a Profit Recovery exercise for its accounts payable, Sanef’s people had no real concerns over the quality of their records. “We were fairly confident,” Vély recalls, but this confidence did not prevent Sanef from agreeing to the audit.

“We decided to seize the opportunity to get an external opinion about how we manage accounts payable in general, and invoice tracking in particular. It was a chance to get an objective view from a professional who is an expert in their field,” the Audit and Procedures Manager explains. Two factors helped tip the Finance Department in favor of initiating the audit. The first was Runview’s payment-by-results deal. The firm is paid on the basis of a percentage of the money recovered. As Vély points out, “It could be said the audit cost us nothing, because we wouldn’t have been able to recover that money otherwise. It’s an obvious plus for us.” The second clincher relates to the technology and methods used by the data-mining experts, Runview. “We just don’t have the tools that Runview has to undertake this kind of examination of our accounts payable,” the Audit and Procedures Manager explains.

Sanef accordingly appointed Runview to examine the accounts payable for seven group business units, the source of the vast majority of invoices issued, being some 180,000 separate items for the fiscal years 2016 to 2020. The aim of the assignment was firstly to find any supplier overpayments, but also to claim back any overlooked input VAT (value-added tax, a type of sales tax common in Europe, which businesses are permitted to claim back). The in-house teams were fairly confident about this second aspect too, but there is always an element of doubt inherent to the administrative complexity underlying this tax. “When it comes to VAT, it is always tricky to know what you can and cannot claim back. Despite our confidence, we were more certain about the overpayments side,” Pascal Vély explains.

A smooth audit and easy relations

The audit started in July 2021 by sending the accounts payable ledgers and the computer file of accounting records (known as “FEC” - a statutory requirement in France for tax purposes) for the companies and fiscal years concerned over Runview’s secure platform, Exaus®. “We already had these FEC files and from a technical viewpoint, sending them over the platform went very well,” Vély reports. At Runview itself, all this data was then analyzed using algorithms developed in-house, and expertly reviewed by consultants, to detect any irregularities there might be. If the need arose, the consultants asked Sanef for copies of invoices, to confirm suspected irregularities.

The next stage was to ratify the errors found. A list of errors was submitted to Sanef for verification; a step that also allowed Sanef to keep control over recovery of overpayments from suppliers. “We have the option to agree or decline to attempt recovery. For example, we declined to ratify one overpayment because of a dispute with the supplier in question,” Vély points out. The Exaus® gateway, built by Runview, was again used as the conduit for these discussions. “The platform is straightforward and easy to use,” Vély confirms.

Towards the end of the mission in August, a Runview team specializing in recovery was tasked with collecting the money relating to ratified irregularities. Circularization exercises were also conducted with 63 of Sanef’s suppliers, generating a response rate of 83%. These exercises are aimed in particular at identifying any credit notes that suppliers might not have sent.

With the exception of the first meeting held between Runview and the freeway concession operator, the whole assignment took place remotely, as a result of the Covid-19 situation. But both sides emphasize the quality of the relationship forged over the course of audit. “We also had a few phone calls with the sales team and with Runview’s consultants, and it all went very well. They are courteous, punctual and professional,” Vély reports approvingly, adding that “the audit did not take up much of our people’s time.”

Outstanding results

The audit’s outcome was extremely positive for the accounts team. Once all the data had been analyzed, just a few dozen irregularities had been found, resulting in some €20,000 being recovered. The average figure for Runview’s clients is €400,000 to €500,000. A not insignificant sum, but low relative to the overall amounts involved. “We are very satisfied with the results. They show that our processes are working well. The audit endorsed our thinking that we need to stay attentive and thorough,” Pascal Vély sums up.

As regards overpayments, while the amounts found were small, they did give the Audit and Procedures Manager the chance to assess how well Runview’s technology performed. Vély observes how “Some of the irregularities were far from obvious at first glance, and cross-checking was needed to find them. The software was really sharp and efficient.”

The audit also showed circularization’s usefulness in identifying credit notes left pending in suppliers’ accounting systems. “We didn’t even know these credit notes existed. They might never have been sent to us. We would not have been able to recover the money without the Profit Recovery audit,” Vély points out.

As regards overlooked input VAT, the few cases found mainly related to VAT on vehicles. “But they were fairly old irregularities and the problem had been resolved since,” Vély explains.

Pascal Vely, Audit and Procedures Manager for Sanef

With positive results from an external organization, the Profit Recovery audit has boosted the Finance Department’s image.

Report shared with the department's staff and line management

Overall, the audit underlines how well the Department is performing: “We used the final audit report provided to share the outcome with the Finance Department, especially the accounting teams because it is the fruit of their labor,” Pascal Vély tells us. “With positive results from an external organization, the Profit Recovery audit has boosted the Finance Department’s image,” he adds.

Those working on the accounts payable process at Sanef will continue in future to apply the methods and monitoring that made their current performance level possible. However, further audits have not been ruled out. “We could use Runview again if our KPIs show us any deterioration in the situation”, Vély explains. In fact, even if no such signs appear, he is planning to repeat the audit over a cycle of 4 or 5 fiscal years, a few years down the line.

He believes such audits will always be helpful to any business. “Firstly, payment by results means it can only be of benefit, financially speaking. Secondly, it might mean you realize there are flaws in your processes. Even if you don’t think there are any, the chances are you will uncover irregularities you would never have spotted without help,” Vély underlines. He himself is also keen to take a look at the possibilities offered by the computer file of accounting records (FEC) analysis platform built by Runview.