Duplicate payments are a drain on your company’s bottom line. Even if you catch them it is embarrassing to go about correcting them. Duplicate payments should never, ever happen. But they do every day.
So what is a duplicate payment? How do they happen?
Most importantly, what can you do to avoid ever making a duplicate payment?
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What is a Duplicate Payment?
A duplicate payment is making a payment to a vendor or supplier that has already been paid.
These are caused by mistakes – typically human error – in an company’s accounts payable (AP) processes. They typically happen because manual or partially automated AP processes do not detect the presence of prior payments or duplicate invoices.
The most common cause is when a supplier invoice does not contain an identifying invoice number, whether it’s an invoice number or a PO number. Even if a manual system is tracking those numbers, their absence will create a strong possibility of duplicate payments.
And duplicate payments can be a BIG problem. They might be for hundreds or even thousands of dollars. Plus, it can take weeks or months to get the payment reversed.
Finally, they are embarrassing and reflect poorly on your company to your vendors and suppliers. No one wants to do business with a company that creates extra needless work for them.
Can Duplicate Payments be Identified After they Happen?
Yes. A careful review of accounts payable transactions will reveal duplicate payments – especially if they are for an odd amount.
And some audit firms specialize in the detection for their clients. They usually charge a percentage of the money regained from their investigations as a fee.
Unfortunately, the most common way the duplicate payments are discovered is when a vendor or supplier calls or emails to point out your mistake. IF you get lucky and they are nice enough to do so.
Your best option is to avoid making these mistakes in the first place.
Avoiding Duplicate Payments Through Invoice Automation
AP automation solutions include extensive verification protocols to ensure that all invoices are correct and proper. They make it virtually impossible to pay duplicate or even fake invoices.
Automated and digitized invoice approval means you can easily create invoice approval workflows that adhere to both GAAP principles as well as AP best practices.
Managers and other approvers can then see both the invoice as well as the data around the invoice instantly. They can easily validate and approve the invoice on any device from anywhere in the world. It’s one reason why managers and executives love invoice approval software.
CoreIntegrator AP automation solutions also highlight unknown suppliers and addresses and send alerts to appropriate managers about possible fraudulent activity.
And when it’s time to pay, CoreIntegrator’s solution can automatically make electronic payments by check, ACH or wire transfer. Or why not use virtual credit cards and receive a 1% rebate on every payment you make!? They are the safest and most fraud-resistant way to pay invoices.
Plus, AP automation includes activity audit trails, giving you deep insight into who authorized payments and what types of verification steps they went through before the approval was given.
With AP automation, it is nearly impossible to make a duplicate payment ever again.
These issues are expensive, embarrassing, and difficult to detect in manual AP processes.
So, your best bet is to avoid making them in the first place.
And the best way to do that is to implement AP automation software that prevents it from happening.