2 Ways Duplicate Payment Audit Is Carried Out
Making duplicate payment is a serious financial drain that a lot of organizations are dealing with. When paying for the same invoice twice accidentally, then you are obviously losing money, which is the same reason why any business should practice duplicate payment audit. Because if not, this is going to eat your margin and also, inhibit the financial progress of your company.
Averagely, there are approximately .05 percent of paid invoices made in error and with that in mind, it results to big 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. Of course, preventing the duplicate payments can be done through duplicate payment audit which can provide huge 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 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The aim of duplicate payment audit here is focused on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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. This is due to the reason that there are some vendors that are requesting for rush check which is typically issued with check request form before they send in their invoice. Well, there’s nothing wrong in giving out checks but the issue arise when the info indicate that the vendor has already been issued a check or when there’s no appropriate backup for the said rush 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.