The Importance Of Duplicate Payment Audit
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. Otherwise, this will eat your margin and at the same time, 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. Well of course, preventing duplicate payments could be done via duplicate payment audit which could provide big benefits in terms of boosting profits, curbing losses and also helping the company to maintain a better cash flow.
The following steps are going to help you in tightening controls that surround invoice processing so by that, you will be able 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. There are other activities on the other hand that might 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Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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. 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. By the time when the vendor sent the original invoice, there’s a chance for duplicate payment to occur.
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.