Value Leakage Analysis
From identified exceptions to validated outcomes
Fictional worked example. All organisations, transactions, scores and comparison figures in this report are illustrative. This is not customer data or a current market benchmark.
Follow a connected example: ingestion → initiative → execution → award → final report
Findings overview
Historical exceptions and future savings use different measurement bases.
Two different benefit paths
Past transactions
$2.00MExceptions to investigate
Validate → agree → recoverFuture transactions
$3.50M / yearPotential prevention benefit
Approve → implement → measureThis fictional scenario separates possible refunds or credits for past transactions from potential future spend reductions. The $2.00M historical amount and $3.50M annual amount are not a combined savings total. No recovery or prevention benefit has been confirmed.
Historical exceptions
Amounts are identified for investigation, not confirmed debts owed by suppliers.
What makes up the $2.00M
| Finding | Amount identified | Basis to validate |
|---|---|---|
| Possible duplicate payments | $890,000 | Match invoices, payments, credits and supplier statements |
| Potential contract overcharges | $760,000 | Compare invoiced rates with applicable signed terms |
| Potential unclaimed rebates | $350,000 | Confirm eligible volumes, exclusions and claim deadlines |
| Total historical exceptions | $2,000,000 | Distinct records; no overlap assumed in this example |
Before claiming a refund, remove reversals and credits, confirm the contract basis and agree the finding with the supplier. Recovery depends on evidence, eligibility, supplier agreement and timing.
Future prevention scenarios
Gross annual run-rate estimates require an approved baseline and implementation.
| Initiative | Potential annual benefit | Measurement basis |
|---|---|---|
| Route future purchases through agreed contracts | $2,000,000 | Eligible volumes × validated unit-price difference |
| Reduce unused demand and subscriptions | $1,500,000 | Units removed × avoidable unit cost |
| Total potential annual prevention | $3,500,000 | Separate purchase populations assumed |
These are scenario estimates, not guaranteed savings. Deduct implementation and operating costs, confirm service impact and remove overlaps with other initiatives. Benefits begin only when changes take effect.
Validation and recovery plan
Track the amount and evidence at each stage.
How an exception becomes a recovery
- Identify and validate Trace the record; check terms and credits
- Agree the finding Confirm a supported claim with the supplier
- Reconcile recovery Match posted cash or credit to the ledger
- Prevent recurrence Implement the control and measure its effect
| Stage | Action | Owner | Evidence |
|---|---|---|---|
| Identify | Create an exception register with source transaction references | Analyst | Reproducible records and calculation |
| Validate | Check contracts, credits, tax and duplicate flags | Finance and procurement | Approved finding with exclusions |
| Agree | Present supported claims to the supplier | Supplier owner | Written agreement or credit note |
| Recover | Reconcile refunds or credits to the ledger | Finance | Posted receipt or applied credit |
| Prevent | Implement controls and measure future transactions | Process owner | Observed results against an agreed baseline |
Report outcomes separately
- Identified: amount awaiting investigation.
- Validated: supported finding approved for action.
- Agreed: refund or credit accepted by the counterparty.
- Recovered: cash received or credit applied and reconciled.
- Prevented: measured reduction in future spend against an agreed baseline.
Reconcile each claim to its source records and exclude it from other claims before reporting a total.