The Importance Of Duplicate Payment Audit
To many organizations these days, making duplicate payment is a major financial drain they face. 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.
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 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 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 – 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 would be attached to the same vendor that has the same or possibly different bank details.
The end goal here of duplicate payment audit is on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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 – yet another vital process of duplicate payment audit in avoiding making duplicate payments. 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. 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. By the time when the vendor sent the original invoice, there’s a chance for duplicate payment to occur.
Well what the accounts payable team do in their duplicate payment audit is to ensure that there’s a solid backup and at the same time, the payment info is entered ASAP to the system once the check is issued.