Why should CFOs consider Recovery Audit Contractors (RACs) as a part of their internal controls?

Have you ever considered which parts of your financial processes might not be as effective? Why are finance teams still making mistakes that cost a million dollars, even if everything else is running smoothly?  

2025 is going to be the most challenging year so far for finance leaders to maintain positive cash flows, and they will even have more controls to manage. It is not enough for a CFO to simply be a scorekeeper. Instead, they must be value protectors, loss preventers, compliance regulators, and ensure the processes in place are driving value to the business. It is going to be a reality that internal controls, in their traditional sense, will still be required, but will not be enough.  

This is the part recovery audit contractors (RACs) are supposed to play. If you still don't consider them thoroughly as part of your control environment, you are still underutilizing a valuable business asset.  

Unprecedented Complexity of 2025 Means Traditional Controls Won't Be Enough  

Some internal controls are always essential for any business. For example, segregation of duties, documented and automated approval workflows, and compliance control checks are key components of any internal control framework. However, finance won’t exist in the real world. Increasingly, financial environments are becoming more complex digital environments.  

Digital transformation means that we have far more sources of data and far more data to manage in any given time period. Internal audit teams say they can't fully meet the organization’s priorities because they lack the proper resources or skills. To be specific, 66% say their capabilities do not fit with the organization’s priorities without some support from outside.  

CFOs have decided to outsource accounts payable and other functions, with 40% planning to do so in 2025, compared to 30% in 2024.  

Recovery Audit Contractors Bring Deep Specialization and Scale  

Specialize recovery audit contractors as if they are specialists embedded in your organization’s financial processes. They do more than audit for quality-- they do it with both scale and focus.  

These companies do the following:  

• Have resources, both human and technological, that are necessary to diagnose problems and are difficult to identify in large volumes of data.  

• Detect issues like overpayments, payments that are made more than once, or errors in pricing that many of your vendors have.  

• Work on contingency or value-based pricing that aligns their interests in your organization with achieving results.  

Where your internal team will only sample a number of transactions to review, recovery audit partners do not have to limit themselves. They can review the entire dataset, enabling timely detection of issues that would otherwise go undetected.

In 2025, recovery auditing will continue to improve through automation and data analytics, making its services even more helpful. New methods can identify data differences almost immediately and assign resources to your risk controls to prevent future losses.

Establishing a Continuous Monitoring Layer, not Just a Snapshot

Conventional controls are periodic. For instance, month-end closes, quarterly reconciliations, or annual audits. Yet, today’s pace requires continuous assurance. Recovery audit companies cover this gap.

Remaining patient until the year's end, adjustments, and recovery audits can:

- Deliver real-time or seamless real-time outcomes.

- Discover repeated information that internal controls neglect until it’s too late.

- Assist in shifting parameters of compliance before mistakes are too advanced.

Aiding in Forcing Vendor and Contract Compliance

Vendor contracts and supplier agreements are high-risk areas. CFOs are well aware that all pricing deviations, missing rebates, or discounts ignored result in profit loss for a company. Recovery auditors excel in:

- Assessing compliance of contracts with thousands of invoices.

- Spotting inconsistencies in the pricing or the terms that are not applied.

- Making sure there are no mistakes when dealing with vendors.

We have internal controls in place to ensure that payments are appropriate. Recovery auditors check to ensure there are no payment errors. This protection helps maintain solid relationships with the suppliers.

Certifying Your Internal Control System

Consider how impactful it would be to have internal control reports even more finalized externally before they reach the board or audit committee. That is the value recovery audit partners bring.

They:

✔ Improve the audit by finding issues that the internal team is missing.

✔ Increase fraud deterrence by uncovering anomalies in data.

✔ Makes an independent confirmation about your controls being adequate.

As of 2025, audit modernization experts state that the key to high-quality controls is incorporating technology and automation. Recovery audit contractors are perfectly fitted to this guidance. They function as a force multiplier to internal teams.

Real Financial Impact Is Not Just a Theory

Recovery audit processes enhance controls, but they also create real value by preserving margins. The precise amount that organizations can recover is the industry data shows that recovery auditing works to prevent:

It also shows the overpayments the organization can recover, improving cash flow and the bottom line. Improve vendor trust by addressing differences openly and fully. This assignment's impact aligns with a CFO's mandate: safeguard capital, lower risk, and create value.

 

Conclusion

This is the reality CFOs face today. Control systems and their provider should do more than check the compliance box. Control systems and their providers should stop losses, control spending, and improve reporting confidence.

Recovery audit contractors bring specialized skills, advanced technology, operational scale, and real-time insights.

When you embed them into your control environment, you amplify the power of your internal controls by:

• Identifying problems before they get out of control

• Verifying your financial operations stands on solid ground

• Enabling your internal team to address the real strategic work

In today’s world, finance functions cannot afford to leave money on the table or risk noncompliance.  The world of finance is not only complex in terms of data and systems, but it is also facing a talent shortage and an increasing demand for greater control.  

Discover Dollar helps finance leaders to incorporate recovery insights into their internal control systems. Using advanced analytics and domain expertise, we provide end-to-end assistance so you do not lose value from leakage.

With our experts, you will know how to turn recovery audits into a seamless part of your internal controls. Safeguard your margins, enhance compliance, and lead with confidence above the rest.