How to Prevent Duplicate Payments in Accounts Payable
If you use traditional approaches, you will miss a lot of duplicates. Procurement & AP automation software like Order.co creates maximum visibility in your invoice processing practice. Order.co centralizes and automates processing, making errors and fraud less likely. For instance, multiple AP clerks working on processing may duplicate a payment if there isn’t a clear process. If you must manually process, ensure that each invoice proceeds through a standard payment workflow . Many companies still operate their AP departments using paper checks.
Manual data entry is extremely prone to errors due to human involvement and terribly slow processing time. Despite the widespread awareness of the perks of digitizing data entry processes, a Corcentric study revealed that about 44% of finance staff still receive invoices via fax. If gone undetected, duplicate payments can result in monumental losses. Besides financial losses, it leads to time being eaten up by businesses to rectify an overpayment. A report by SAP Concur concluded that SMEs might blow up to $12,000 a month on duplicate payments.
Here are the stages of a typical AP audit:
However, to keep an eye out for potential duplicates, it’s best to know the various causes. During a recent Peeriosity PeercastTM, a Peeriosity member company with over $15 billion USD in annual revenue shared their approach to managing duplicate payments. Their Accounts Payable organization processes 2 million invoices a year with over $8 billion USD in payments to vendors. When it comes to detecting duplicate payments, though, the automated controls ERP systems offer can actually slow your operations and impact productivity.
- In addition, enterprise resource planning systems cannot overcome human error with invoice data entry to identify duplicates and mistakes.
- Here’s a short video about risk assessment for accounts payable auditors.
- Some fraudsters will use mail drops as their address instead of a P.O.
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Accounts Payable Duplicate Payment Audits payments burn through a substantial portion of a company’s wealth if left uncatered. There are several causes for duplicate payments, some being the manual data entry process and human errors, while some can also be frauds and invoice tampering. According to the Institute of Financial Operations , erroneous payments, which include duplicate payments, incorrect freight, and fraud, would typically be 0.2 to 2% of an enterprise’s total AP spend.
AP Audit Reporting
If the same employees always stay in charge of analyzing the MVF, they might become normalized to the task, hurrying through the list without devoting adequate attention to identify crucial mistakes. Careers Join fast moving & highly motivated team to create scalable products for enterprises. We have in-house developers who are here to ensure our technology works for our clients — not against them.
If a corporate https://quick-bookkeeping.net/ issues a duplicate or erroneous payment, AR will refund it immediately. A vendor might not add a purchase order number on an invoice, delaying the accounts payable team in getting the invoice into the accounting or ERP system because of the time taken to identify the correct PO number. Docsumo lets you automate entity matching across documents to corroborate customer information, which reduces duplicate payments and delays. It also enables you to detect document fraud, including incorrect metadata, font changes or extra layers. Upon confirmation that a correction entry does not exist in the data, a third-party audit firm will be contacting your supplier’s receivables department to discuss the potential payment issue.
Errors in a master vendor file
A duplicate payment occurs when an organization mistakenly pays the same invoice twice. A duplicate payment is an additional payment made to a supplier that has already been paid. Duplicate payments are caused by flaws in an entity’s accounts payable processes that do not detect the presence of prior payments. For example, the payables software should automatically detect a supplier invoice number for which a payment has already been made. The most common case in which duplicate payments occur is when a supplier invoice does not contain an identifying invoice number . Most of the issues found during the AP audit process – intentional or not – are due to human error.