£6M recovered from a goods-received-not-invoiced balance

The challenge

The organisation’s goods-received-not-invoiced (GRNI) balance had grown steadily for years. Finance couldn’t say with confidence which accruals were real liabilities and which were stale, and the balance kept being flagged at year end.

Before

• Balance growing year on year
• Valid liabilities mixed with stale accruals
• Flagged again at every year end

Unexplained→£6Mreturned to the P&L

After

• Every material line classified and evidenced
• Root causes fixed in process and system
• Clear ownership of the balance

Our approach

• Sized the balance by analysing purchase orders, receipts, invoices and supplier activity across the ledger.
• Classified every material line as a valid liability, a matching or receipting error, or a stale accrual.
• Traced the root causes back through the Procure-to-Pay process: receipting practice, PO matching and ERP configuration.
• Resolved the systemic causes with Finance and Procurement, evidencing each adjustment for audit, so the balance stopped rebuilding.

1. 01SizeLedger, PO, receipt and invoice data
2. 02ClassifyValid, error or stale
3. 03TraceRoot causes through P2P
4. 04ResolveEvidenced adjustments
5. 05PreventProcess and configuration fixes

• System / automated
• People decision
• Control point

The outcome

• Around £6M recovered to the P&L
• A clean, explainable GRNI balance with ownership in place
• Process and system fixes that stop the balance rebuilding