How To Best Handle Post Audit Claims

16 December, 2023
4 min
Brett Johnson, AVP, Global Enablement

Table of Content

Key Takeaways
What Are Post Audit Claims?
Types of Post Audit Claims
Best Ways to Handle Post Audit Claims
4 Ways to Prevent Post Audit Claims

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Key Takeaways

  • Gain knowledge about various post audit claim types such as billing discrepancies, contract non-compliance, and overpayment recovery.
  • Learn best practices for handling post audit claims, including establishing a clear post audit policy, prompt claim responses, and leveraging technology. 
  • Discover preventive measures like thorough documentation of deals, robust document management systems, and clear communication of terms with customers.


Navigating the complexities of post audit claims can be a challenging yet essential aspect of business operations. In this increasingly interconnected world of finance and commerce, understanding the nuances of these claims is not just a matter of compliance, but also a strategic necessity. 

Post audit claims, often arising long after a transaction has been concluded, can catch many businesses off-guard. These claims, typically made by customers or auditors, relate to discrepancies or disputes in past financial transactions. They focus on small, but important details in contracts, billing, or rules that might have been missed. Handling these claims means not just knowing about the past deal but also being sharp about legal and money-related details.

This blog serves as a comprehensive guide to understanding the various types of post audit claims and their implications for your business. More importantly, it provides actionable strategies to handle these claims efficiently and proactively. So let’s get started.

What Are Post Audit Claims?

Post audit claims are basically a demand for a payment generated by customers or third-party auditors working on behalf of the customers. Such claims are made based on issues such as trade promotions agreed upon but not taken, invoicing errors, and compliance violations not previously identified. 

Post audit claims, while a standard part of business, often carry a negative connotation, and there are several reasons for this perception. Here’s why:

  • Many claims are incorrect: Around half of these audit claims turn out to be wrong. Sometimes the same issue is brought up more than once, which is called double or triple dipping.
  • Early deductions due to policy differences: Sometimes, companies make deductions based on their policies before they fully investigate the issue. This means they might deduct money too soon.
  • Repeating old issues: Auditors sometimes bring up things that were already fixed in the past, like issues with allowances that were resolved earlier. This can make post audits seem like they’re just going over old ground.

Types of Post Audit Claims

It’s important to understand the different types of post audit claims that businesses encounter. Each type presents its unique challenges and requires a specific approach to address them effectively. Here are the main types of post audit claims you should be aware of:


  1. Billing discrepancies: These claims arise when there’s a mismatch between what was charged and what was agreed upon in the contract. They often involve errors in pricing, quantity, or calculation in invoices.
  2. Contract non-compliance: These are claims related to violations of contract terms. This could be about not meeting service levels, product quality issues, or failing to adhere to delivery timelines.
  3. Overpayment recovery: These claims occur when a customer or auditor identifies that they have overpaid in a transaction, due to reasons like double billing or incorrect rate application.
  4. Warranty or guarantee claims: These are claims made due to failure to meet warranty or guarantee terms like a product not performing as promised within the warranty period.
  5. Regulatory compliance issues: These claims are raised when a transaction is found to be non-compliant with legal or regulatory standards, which could include taxation errors or violation of industry-specific regulations.

Best Ways to Handle Post Audit Claims

Effectively handling post audit claims is crucial for maintaining financial integrity and positive business relationships. Here are some best practices to manage these claims efficiently:


1. Establish and enforce a clear post audit policy:

  • Implement a policy that sets a time limit for how old a claim can be.
  • Require complete documentation for every claim, including necessary details and evidence.
  • Place immediate holds on claims with unrealistic resolution timelines.
  • Ensure transparency regarding the grace period and its flexibility, promoting a policy that is fair to both parties.

2. Prompt response to post audit claims:

  • Address claims quickly to reduce resolution delays and the risk of having to write them off.
  • Clarify timelines for resolving claims with both customers and suppliers.
  • Discourage customers or auditors from making deductions before the end of the grace period.

3. Strictly handle non-documented claims:

  • Use SOX compliance as a basis to reject any non-documented claims.
  • Maintain a comprehensive list of required documents, such as proof of delivery (POD), bill of lading (BOL), invoice copies, and explanations for deductions.
  • This documentation helps prevent future disputes and ensures a clear basis for resolving claims.

4. Implement regular audits and reviews:

  • Conduct internal audits to identify and rectify potential issues before they result in post audit claims.
  • Regular reviews of contracts and transactions can help in spotting discrepancies early.

5. Foster open communication with customers:

  • Maintain open lines of communication with customers to understand their concerns and expectations.
  • Use feedback to improve processes and prevent recurring issues.

6. Leverage technology for better management:

  • Utilize financial software or systems that can help track transactions and flag potential issues early.
  • Automated systems can streamline the claims process, making it more efficient and less prone to errors.

By implementing these strategies, businesses can handle post audit claims more effectively, reducing the risk and impact they have on the organization. These practices not only help in managing current claims but also lay a strong foundation for preventing future issues.

4 Ways to Prevent Post Audit Claims

Preventing post audit claims is as crucial as managing them. Here are four effective strategies that can help businesses minimize the risk of post audit claims:

1. Document promotional deals thoroughly:

  • Utilize Section 404 of SOX Compliance to maintain robust internal controls over financial documentation and reporting, particularly for publicly-traded companies.
  • Create detailed documentation for each promotional deal, including SKU-level details, quantities, pricing, and expiry information.
  • Send written confirmations to customers with all promotional deal details and any claim updates, ensuring both parties are on the same page.

2. Implement a robust document management system:

  • Establish a centralized document repository where all necessary documents are stored with proper indexing, making information retrieval more efficient.
  • Update the document library in real-time whenever new customers are added, which aids in the easy tracing of documents.
  • Use a deduction tracker to continuously monitor and easily track multiple deductions by third-party auditors, reducing the risk of double or triple dipping.

3. Strengthen internal procedures:

  • Develop well-defined processes to accelerate deduction resolution, tracking metrics like days deductions outstanding (DDO).
  • Build a self-learning system to identify and learn from potential causes of post audit issues, aiding in future prevention.
  • Establish configurable workflows and maintain transparent communication between sales and accounting teams to eliminate ambiguities and streamline post audit resolutions.

4. Ensure a clear understanding of deal terms with customers:

  • Clarify terms and conditions internally among sales and other relevant teams to avoid misunderstandings.
  • Provide customers with clear, detailed explanations based on shipping dates, order dates, and receiving dates, making transactions transparent and straightforward.


The effective management of post audit claims is crucial for business stability and growth. By implementing key strategies such as thorough documentation, clear communication, and robust internal processes, companies can greatly reduce the occurrence of these claims. This approach not only streamlines operations but also strengthens customer trust and transparency, which are vital for long-term success.

Incorporating technology into this process is essential in today’s business landscape. Solutions like HighRadius’ Deductions Management, with features like deductions validity predictors and auto-match algorithms, significantly enhance the efficiency of handling post audit claims. These tools improve analyst productivity by 40%, offering a substantial advantage in financial operations.

HighRadius’ Deductions Management is a prime example of how technology can transform a business challenge into an opportunity. Its capabilities in streamlining deduction processes and improving financial outcomes highlight the importance of adopting technological solutions. For businesses navigating the complexities of post audit claims, integrating such technology is key to maintaining financial health and driving growth.



1. What are the post audit steps?

Post audit steps typically involve reviewing audit findings, creating an action plan to address identified issues, implementing changes or corrections, and monitoring these adjustments for effectiveness. This process ensures continuous improvement and compliance with audit standards.

2. Why should a post audit be done?

A post audit is done to assess the effectiveness of business decisions, ensure compliance with financial and operational standards, identify areas for improvement, and reinforce accountability. It helps in refining strategies and optimizing performance.

3. How can disagreements on post audit claims be resolved?

Disagreements on post audit claims can be resolved through clear communication, reviewing relevant documentation, involving neutral third-party mediators if necessary, and negotiating a fair resolution. Understanding each party’s perspective and finding a mutually agreeable solution is key.

4. What is the post audit process?

The post audit process involves reviewing completed transactions or projects to evaluate their success and compliance, identifying discrepancies or areas for improvement, and implementing changes based on these insights to enhance future performance and decision-making.

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