The Importance Of Duplicate Payment Audit
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. 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. 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.
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. On the other hand, you should know that there are some other activities which can prompt duplication of the vendor master file.
As a quick example, if there is a different vendor code that’s selected, there is a chance that duplicate vendor master file is made when the vendor invoice has entered into ERP system manually or automatically. This new file and code will then be attached to 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Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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 – yet another vital process of duplicate payment audit in avoiding 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 is not bad to give out check but problems arise in the event that there’s no appropriate backup for the said rush check or perhaps the info indicate that the vendor has already been issued a check. There’s a chance that duplicate payment occurs when the vendor sends the original invoice.
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.