How Duplicate Payment Audit Is Done?
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.
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 vital that the accounts payable team on lookout constantly and take the preventive steps to keep 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.
In the next lines, you are going to discover a couple of steps that will help you to have tighter security that surround invoice processing so by that, you’ll have the chance to get rid making duplicate payments for good.
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.
To give you an example, when the vendor invoice is entered into ERP system manually or automatically, duplicate vendor master file will be made if there is a different vendor code selected. The new file as well as code is attached to same vendor with the same or potentially 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Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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. 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. When the vendor sends the original invoice, then there is a probability that a duplicate payment occurs.
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.