- Solution overview
AI-powered post-payment audit for retailers
How to maximize recovery and minimize leakage
Challenge
Retailers risk losing cash due to overpayments across the source-to-pay value chain
For retail and ecommerce organizations, complex business processes, dynamic commercial terms, and a rising number of supplier transactions are compromising compliance. There's simply too much data to audit across channels due to the high volume of events, intermittent deals and promotions, retail price adjustments, seasonal variations, and joint campaigns.
Often, agreements with suppliers are over email and not documented in a centralized deal or co-op management system. This makes analyzing contractual agreements against actual performance a daunting task, often resulting in overlooked discrepancies and financial losses.
As a result, companies continue to lose millions of dollars in leakages. Due to the complexity of business operations that involve goods for resale and supply chain nuances, the percentage of leakages for retailers can range from 0.2% to 0.5% of supplier spend. This means a retailer with an annual spend of $10 billion can expect $20 million to $50 million in potential annual leakages.
Using our years of expertise in the retail industry and advanced technologies like artificial intelligence (AI), Genpact has reimagined the post-payment audit program. We're helping retailers identify, recover, and prevent leakages that might be overlooked in standard review processes.
Solution
A more effective method to detect and prevent revenue leakage
Our AI-powered post-payment audit (PPA) solution drives end-to-end auditing and recovery – and generates a wealth of actionable business insights. As a customizable, cloud-agnostic, and multilingual tool, it uses advanced data analytics and AI to meticulously examine large volumes of transactions to detect anomalies, missed promotions, and noncompliant payments.
Trained and tested
The PPA solution is built to support over 150 leakage concepts. It runs leakage scenarios, such as allowances, volumes, margin loss, pricing damages, and other retail financial risk scenarios. This helps retailers recover lost funds and act on predictive insights to prevent future issues, leading to a reduction in operational costs and greater financial control.
The solution can scale your available technology stack and integrate with various cutting-edge technologies, including OpenAI, Microsoft Copilot, Databricks, and ServiceNow, among others.
Leakage points across the source-to-pay value chain
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Generative AI-powered processes
Our PPA solution incorporates generative AI (gen AI) to simplify the supplier post-audit and recovery audit by analyzing unstructured data – mainly reading contractual agreements and email exchanges between merchants and suppliers. The combination of keyword and contextual search engines on underlying data stored in vector databases post-semantic chunking generates a response using a retrieval-augmented generation-based approach. This makes the auditing process simpler and more precise, thanks to several advanced features:
- Advanced email and contract document search: Natural language processing is used to conduct intricate searches of emails and lengthy contracts to find relevant information on supplier transactions, terms, funding, commitments, and agreements
- Enhanced accuracy and efficiency: Gen AI improves the speed at which a team can retrieve information, identify anomalies, and prioritize audit efforts
- Robust anomaly detection: This innovative feature will offer real-time monitoring of emails, committed obligations, and transactions to proactively alert teams of any potential discrepancies
Real-time visibility
Our PPA tool supports employees with detailed and customizable reporting features and real-time dashboards for data-driven business insights. Tailored reports allow stakeholders to monitor processed, pending, and rejected claims proactively. Employees can even drill down by supplier, buyer, department, claim types, root causes, and year-on-year trends for a better user experience.
Impact
Saving more money in less time
Clients using Genpact's PPA solution saw $1 billion in recoveries across source-to-pay processes. When they transform their supplier post-audit and recovery audits, they can recover funds faster, reduce risk, and improve their overall audit effectiveness.
For one of the world's largest retailers, we replaced an existing post-payment audit program with our Microsoft Azure-enabled PPA solution. We helped the retailer increase recoveries by more than 50% in the first year. In parallel, the Genpact team shared insights to prevent upstream leakages and created a plan to eliminate over $10 million of leakages.
In another example, an online retailer was facing challenges with data residing across multiple systems and manually maintained files. Its manual processing of rebates, promotions, and allowances only made things worse, giving limited visibility into the completeness of billing for commercial terms with suppliers. With our PPA solution, we helped the retailer unlock $9 million by identifying missed commercial credits on allowances, rebates, and pricing mismatches, among other areas.
In summary, our digitally enabled PPA solution can:
- Significantly reduce financial leakage through partnering with business stakeholders, including merchants, supply chain partners, and other groups
- Grow recoveries over historical programs by up to 30% through deeper mining of transaction data and benchmarking across retail leakage scenarios
- Boost claim governance efficiency by up to 30% using a variety of technology enablers across the claim governance process
- Speed up audit cycles by up to 20% using matured audit modules built and ready to deploy over Microsoft Azure and Databricks-enabled solution
- Increase audit efficiency by up to 20%–25% by using our team of retail audit experts equipped with a library of recovery audit workbooks and digital tools like Microsoft Copilot
When time is money, now is the time to invest in AI-powered PPA processes.