Duplicate payment is a significant financial drain that many organizations are facing nowadays. When you do pay for the same invoice twice accidentally, then you automatically lose money in that instance which is the reason why businesses need to practice duplicate payment audit. This will otherwise eat your margin and inhibit the financial progress of your company at the same time.
On average, there are around .05 percent of paid invoices made in error and for that, it result to a huge loss on the part of the company. It is vitally important that the accounts payable team be on the lookout constantly and take the stpes to prevent paying the invoice twice. Obviously, duplicate payments may be prevented through duplicate payment audit which may also provide great benefits in terms of boosting profits, curbing losses and also helping the company to maintain a better cash flow.
The steps below are going to help you tighten controls that surround invoice processing which will then allow you to permanently eliminate making duplicate payments.
Tip number 1. Review your vendor master files regularly to remove duplicated vendors – your accounts payable system or known as ERP system should be designed to accommodate only one vendor master file record on every supplier. There are other activities on the other hand that might prompt duplication of the vendor master file.
For instance, when the vendor invoice has entered into ERP system manually or automatically, duplicate vendor master file will be made if there’s a different vendor code that’s selected. This new file and code would be attached to the same vendor that has the same or possibly different bank details.
The end goal here of duplicate payment audit is on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.
Tip number 2. Control rush check requests – as a matter of fact, in avoiding making duplicate payments, this technique of duplicate payment audit is very important. The main reason for this is that, there are other vendors that request for rush check to which it is often issued with a check request form before they send in their invoice. It isn’t bad to give out a check but problems do rise when there’s no appropriate backup for the said rush check or perhaps the info indicate that the vendor has already been issued a check. By the time when the vendor sent the original invoice, there’s a chance for duplicate payment to occur.
Well what the accounts payable team do in their duplicate payment audit is to ensure that there’s a solid backup and at the same time, the payment info is entered ASAP to the system once the check is issued.