Implementing strong internal controls is a primary step to prevent duplicate payments. This involves establishing clear policies requiring unique invoice numbers and enforcing a multi-level approval process. Segregation of duties within accounts payable ensures different individuals handle receiving, approving, and processing payments, creating checks and balances. For example, the person entering an invoice should not also authorize its payment.
How to Help Reduce Duplicate Payments by Managing Your Vendor Master File (VMF)
- Carefully check your vendor master file to see if the vendor is listed under a variation of their name, a misspelling, or a parent company.
- Instead, stick to a single source of truth for each transaction and use one payment process that operates the same way for every payment.
- Processing invoices is tedious work, yet it requires tremendous focus and attention to detail.
- The platform maintains detailed records of invoice submissions, processing steps, payment approvals, and execution timestamps.
- Preventing duplicate payments requires a combination of automation, process controls, and human oversight.
- Consider a scenario where a vendor sends an invoice via email to accounting and a paper copy to purchasing.
- But those benefits do not come without the universal prices of time, labor, and cost.
For instance, invoices sent in different formats—such as both email and paper—can lead to confusion and result in double payments. Additionally, in hybrid work environments, invoices might be processed in multiple locations, increasing the likelihood of errors. Rather than blindly clearing invoices one after another, verifying invoices at each step can prevent inconveniences for both parties. To illustrate, consider the case of a multinational corporation that implemented a state-of-the-art payment processing system.
“My favourite thing is our company culture”
- For example, a vendor originally listed as “Global Tech Inc.” may later be entered as “Global Tech LLC” following a rebranding.
- Through a combination of manual review and data analysis, auditors can pinpoint the root causes of duplicate payments and recommend corrective actions to prevent recurrence.
- Regularly auditing and cleansing the master vendor file helps eliminate redundant entries caused by slight variations in names, addresses, or account details.
- The accounts payable department in any company is a hive of activity, with a team of professionals working daily to keep the company’s financial wheels in motion.
- His expertise is dedicated to empowering both new and established clients to achieve their highest aspirations.
According to one recent G2 review, switching to Ramp was the best decision they made. Non-standardized naming conventions (e.g., “ABC Co.” vs. “ABC Company, Inc.”) or lack of vendor master file maintenance can result in multiple payments to the same supplier. You can even pay digitally and have BILL send a paper check for you, so you don’t have to wait for that check to clear.
Automate manual data entry
- Duplicate payments can arise from various sources, including human error, system inefficiencies, and even fraudulent activities.
- Businesses that process recurring invoices must ensure that automated payments align with the agreed billing cycle.
- This prevents the same invoice from being sent to multiple departments or people.
- This post explains what you need to know about duplicate payments, including 4 simple tips to help prevent them.
Paper invoices can be scanned upon receipt and entered into the same system as the digital invoices. Migrations to new systems and eInvoicing deployments and can cause confusion and disarray. It can be easy for Oil And Gas Accounting duplicates to slip through as your data migrates and your team get to grips with the new software. Making checking payments difficult and time-consuming, and therefore making duplicates easy to miss. There can be many reasons for human error, from deception to honest mistakes. Many of these mistakes could be caused by confusion from large-scale change including staffing changes, new team structures, mergers or acquisitions.
- Even the best intake systems cannot prevent duplicate payments from sneaking in without proper controls.
- Many AP automation tools, ERP systems, and AI-driven AP solutions integrate invoice matching as a core feature.
- That’s why it’s critical that every organization takes the appropriate steps to protect against this scourge.
- If the scheme works, the shell company starts sending invoices for large amounts.
- Ramp Bill Pay sets a new benchmark for AP software by combining intelligent automation, seamless ERP connections, and workflows that drive real results.
Klippa DocHorizon revolutionizes document automation, enhancing collaboration and ensuring transparency. It covers diverse documents, prevents duplicates with entity matching, and ensures precision through industry-leading OCR accuracy. Klippa enhances solution reliability with a Human-in-the-loop (HITL) option for added data checks in streamlined workflows.
Detecting and preventing duplicate payments in accounts payable
For example, DOKKA automatically identifies duplicate invoices, which significantly reduces the risk of duplicate payments. System glitches or integration issues within accounting software or enterprise resource planning (ERP) systems can also lead to duplicate payments. Technical errors might cause an invoice to be reprocessed or prevent proper flagging. Issues with vendor master files, such as duplicate vendor entries or outdated information, can result in payments to the same vendor under different internal accounts. Medius software stands as a crucial how to prevent duplicate payments tool in this effort, offering innovative features specifically designed to prevent duplicate payments. From its automated invoice processing to AI-driven error detection capabilities, Medius equips AP managers with the necessary technology to protect their processes against these errors.
Why do duplicate invoice payments occur?
Data extraction tools can sometimes be hit or https://antantic.com/how-to-calculate-cost-of-goods-manufactured-cogm/ miss, and if an invoice is formatted differently to what it expects, it can become confused and interpret it incorrectly. It’s important to take this into account and ensure incoming invoices are uniform to avoid inaccuracy and further checks. Another way to combat this is to use more sophisticated automated systems. Some organisations have found that AI-based tools them higher accuracy than OCR alone. Every duplicate payment equals lost working capital, man-hours wasted, and audit exposure. Over time, it adds up to lakhs or crores in preventable losses — and trust issues with vendors, staff, and your board.