Duplicate payments are a huge concern within any organization.
Early detection makes things easier to rectify. However, if a duplicate payment is not caught right away, it can be much harder to prove.
The time required to backtrack through documentation, on top of the conversations between the accounting team members and vendors to find resolution can be cumbersome.
The bottom line is that duplicate invoicing happens to every company at some point during their operation and when it does happen and continues to happen, it can become a huge financial drain.
Learning that an invoice has been paid twice can be frustrating to say the least. The financial loss eats at your margins putting a roadblock in the financial progress of your company.
The good news is that duplicate invoice payments can be avoided if the right measures are taken in advance. The following, are some suggested steps that will help you gain more control over the invoicing process:
1. Vendor Master File Review
There should only be one master file record per supplier. It’s important to always check for double vendor entries and then once found, merge or delete the duplicate files.
2. Miskeying and Misreading Prevention
If a vendor sends a handwritten invoice or partially handwritten invoice, it can sometimes be hard to decipher the “a” from the “o” etc. This is especially true for service industry professionals such as plumbers, hvac technicians, movers, and electricians who create a manual invoice and then proceed to hand it into the office for processing. If your company uses an optical character recognition tool (OCR) it may be difficult for it to capture the data on the invoice as well.
4. Double Paying on Multiple Source Documents
Sometimes a vendor will send a quote and then the invoice later or both at the same time. When this happens in either scenario, the quote can be mistaken for the invoice and then double payment occurs.
5. Multiple invoice receipts
Another way a duplicate payment can happen is when the same invoice is sent in more than one way. An example could be that initially you receive a copy of the invoice through email and then a second copy is sent by mail. The confusion can result in a double payment.
One way you can prevent this from happening is to only provide your vendor with one form of invoice communication.
6. Request accurate PO number on invoices
If the Purchase Order isn’t included on the invoice, there could be a delay in invoice payment prompting another reminder invoice to go out. This could result in a double payment. If the PO is missing from an invoice it’s best to instruct the accounting team to contact the vendor right away so the invoice can be matched to the job appropriately.
7. Stay on top of “paid” status invoices
After paying an invoice it’s important to mark it as paid immediately. This includes back end information as well including in the job detail sections of your accounting software.
How To Detect A Duplicate Payment
Duplicate payment detection can be hard to discover before the payment is processed. This often comes down to different dates attached to the same invoice.
Sometimes, the duplicate payments are beyond your control, even after you and your accounting team have exercised all prevention solutions. What happens on the other end is ultimately out of your control, especially if the error comes from the vendor’s side of things (for example, their accounts payable clerk missed a number on the pick-up order or invoice).
One way you can detect duplicate payments is through an account system audit. This can be done internally or out-sourced however, it can be expensive.
Your accounting department should be trained on finding duplicate payments and also on the next steps once found.
The downfall is that if your accounting team is already busy with their day to day tasks, adding the painstaking task of finding and remedying a duplicate payment situation can drastically set back productivity.
This is when hiring an outside source to perform this task should be considered.
Fortunately, we are living in such a technologically advanced world, there are self-audit tools that can help monitor and track AP processes. While not 100% accurate at all times, machine learning and analytics make discrepancies in payments vs. invoices faster and easier to identify.
At Ash Conversions International, we’ve been providing solutions for document and data driven business processes for over 40 years. Our Accounts Payable Automation solution not only detects duplicate payments but also allows you to:
- Eliminate 80% of your AP department’s workload, freeing your Accounts Payable team to perform more strategic tasks
- Expand rapidly without the need for additional Payables staff
- Process invoices automatically with a touchless rate upwards of 95%
- Reduce month-end closing time and gain complete visibility with standard reports available at your fingertips, providing a complete overview of accruals and spend by vendor, department or date
- Eliminate compliance & financial risk; ACI is CSAE 3416 SOC certified, employing best practices including predefined approval workflows and complete audit trails
- Process purchase order (PO) invoices automatically with touchless 3-way matching
- Process non-PO invoices easily , continually increasing touchless matching rate with the use of Artificial Intelligence
- Automate approvals and business rules to allow for continual learning and improvement in approval automation.
You can learn more about ACI’s Accounts Payable Automation services by clicking here. Alternately, you can connect with us by calling 800-719-9621 or by clicking the button below.
