Preventing Duplicate Payments Ultimate Supplier Management

The primary challenge is the detection of the issue before the payment is processed. An additional challenge is the identification of the cause of the error and then the implementation of the needed process improvements. In this post, I’ll answer questions such as, “how should we test accounts payable? ” We’ll also take a look at common payables-related risks and how to respond to them. In short, you will learn what you need to know about auditing accounts payable.

• On average, a business makes 0.1 to 0.5% of duplicate payments depending on their payment methods.
• No matter how many invoices you deal with, manual or semi-automated methods can still open doors for petty errors.
• If control weaknesses are present, consider performing fraud-related procedures.
• Identifying missing or incomplete vendor data and flagging vendors with invalid or suspicious addresses.
• For example, it allows cross-checking and comparing invoices, leaving no scope for missing or mixing data.

Simplifying and speeding access to records for auditors – invoices, POs, supplier lists will ensure the accuracy of the audit, and the completeness of the resulting report. The time saving from AP automation can also translate into cost savings since the actual audit should take less time than a paper-based AP process. Accounts payable auditing is the process of reviewing, in detail, all the related financial information that resides on a company’s accounts payable records. Plus, it’s likely to trigger a wider internal audit to see how many other duplicate payments might have gone out over the past year or more. Review the best ways to review accounts payable to detect duplicate payments. Whether this is done in house or externally, this presentation provides steps to follow to thoroughly review accounts payable.

AP Manager Alert: Transform the Way Your Finance Team Operates

If you note any significant variances (that can’t be explained), then obtain a detail of those particular expense accounts and investigate the cause. (To obtain a copy of the mail-drop table, contact the author of this document). Or, if you have time, you can also search for Mail Boxes, Etc. on and put the addresses in a database and then conduct your address matching accordingly.

• This scenario happens due to several factors, such as how easy it is to commit fraud if a company uses traditional AP processes, an approach that is prone to erroneous reports and misplacement.
• While it’s tempting to assume ERP controls are sufficient, the facts prove it simply isn’t so.
• First, it’s easy to increase net income by not recording period-end payables.
• Therefore, a centralized database is literally the only way for team members to access the information required to perform their duties.

Duplicate payments are simply a fact within the accounts payable world… they can happen, they do happen, and they’ll happen again. Once you acknowledge the reality, you’re one step closer to reducing or even eliminating them. The company has a three-pronged approach to controlling duplicate payments, which includes system checks, a duplicate review tool, and an external partner review. Departments with sizeable budgets and a large number of transactions may have different individuals in contact with vendors and, therefore, would be more susceptible to paying the same vendor invoice twice. Being proactive and implementing controls relevant to these areas will help prevent and detect instances of duplicate payments. Limiting your vendor payment options to automated electronic payment forms reduces the likelihood of processing payments multiple times.

AccountingTools

This algorithm made it possible to detect a real employee (“Kathy”) whose SSN was the same as a Accounts Payable Duplicate Payment Audits EIN . The company name, which we will call “ABC Inc”, happened to be on the same street, city, and state as a person with the same last name as the employee . Isolates the root causes of errors so you can determine how to tighten global controls. Includes workbench tools you can use to generate claims, attach relevant documents and build a strong audit trail.

You must dispose of obsolete information, eliminate duplicate vendors, and drop a letter to all your vendors requesting them to corroborate their contact information. Kickback Schemes – These schemes happen when a third party offers an employee money to manipulate business decisions, including vendor selection. ACH Fraud – ACH fraud occurs when the perpetrator gains access to funds when they go through an automated clearinghouse meant to deal with electronic fund transfers. Read our blog, What is Accounts Payable Audit and How to Prevent Payment Errors, to gain insight into where your recovery audit process and partner stand. Every day, we’re creating, iterating, and disrupting the recovery audit industry to better serve your business.

Want to eliminate duplicate invoice payments?

While it might not work for all https://quick-bookkeeping.net/s, sometimes simply requesting that they stop sending duplicates will keep them from confusing matters with copies of invoices. According to Mary Schaeffer, warning vendors that duplicate copies could create delays in their payments might be enough to stop that practice. In situations where vendors have a history of sending duplicate invoices, create an ACT list. This solution will require that the team hold onto an invoice for a few days as you check against any potential duplicates. Many modern payment systems have a built-in control that will prompt an error message to the user and not allow the same vendor, invoice number, and payment amount to be processed. The user may be able to bypass this built-in control by adding a space or character to the invoice number.

Auditors will perform a number of procedures at this stage, including examining the Standard Operating Procedures, and a recalculation of supplier invoices and payments. Other losses aside, duplicate payments and subsequent recovery audits or check requests can lead to strained relationships with your vendors and suppliers. The second risk of duplicate payments is your AP department’s time.

More Email, More Duplicates

It’s all-too easy to boost net income by not recording period-end payables, so these need to be verified. In a recent survey of over 350 scientists ,at least half of them believe that AI still won’t be able to replace all human jobs even 120 years from now. In short, the best way to use tools like AI and automation isn’t to replace human beings but to work in partnership with them. In the digital age, your payment system can enjoy the best of all worlds — centralized for better oversight, distributed for efficiency, and automated for scalability. A data platform built for expansive data access, powerful analytics and automation.