The Importance Of Duplicate Payment Audit
Duplicate payment is a significant financial drain that many organizations are facing nowadays. 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. Otherwise, this will eat your margin and at the same time, 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. 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.
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. The new file as well as code is attached to same vendor with the same or potentially 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The aim of duplicate payment audit here is focused on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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. 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.