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.
Well on average, there are actually .05 percent of paid invoices made in error and because of that, it leads to huge loss on the part of the company. It is integral that the accounts payable team to be on the lookout constantly and take the preventive steps in keeping invoices from being paid 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.
In the next lines, you are going to discover a couple of steps that will help you to have tighter security that surround invoice processing so by that, you’ll have the chance to get rid making duplicate payments for good.
Tip number 1. Review your vendor master files regularly to remove duplicated vendors – your accounts payable system or also known as ERP system must be designed to accommodate just 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.
To give you an example, when the vendor invoice is entered into ERP system manually or automatically, duplicate vendor master file will be made if there is a different vendor code selected. This new file and code will then be attached to same vendor that has the same or possibly different bank details.
The aim of duplicate payment audit here is focused on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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 is not bad to give out check but problems arise in the event that there’s no appropriate backup for the said rush check or perhaps the info indicate that the vendor has already been issued a check. There’s a chance that duplicate payment occurs when the vendor sends the original invoice.
What the accounts payable team do in their duplicate payment audit is ensuring that there is a solid backup and also, the payment info is immediately entered to the system upon the check is issued.