To many organizations these days, making duplicate payment is a major financial drain they face. 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. Because if not, this is going to eat your margin and also, inhibit the financial progress of your company.
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 vital that the accounts payable team on lookout constantly and take the preventive steps to keep 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.
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 – the accounts payable system or ERP system of your company ought to be made in a way that it only accommodates one vendor master file record on every supplier. On the other hand, there are other activities that may 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The end goal here of duplicate payment audit is on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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 – this is yet another integral duplicate payment audit technique done to avoid making duplicate payments. The reason for this is that, there are some vendors that request for such check which is often issued with 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. When the vendor sends the original invoice, then there is a probability that a duplicate payment occurs.
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.