How Duplicate Payment Audit Is Done?
Duplicate payment is a significant financial drain that many organizations are facing nowadays. When you pay for the same invoice twice accidentally, then you obviously are tossing money, which is the reason why any business has 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 integral that the accounts payable team to be on the lookout constantly and take the preventive steps in keeping 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 – 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.
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. This new file and code would be attached to the same vendor that has the same or possibly different bank details.
Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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. 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. 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.
Ensuring that there’s a solid backup and that the payment info is entered immediately to the system upon the issuance of check is what the accounts payable team do in their duplicate payment audit.