How Duplicate Payment Audit Is Done?
To many organizations these days, making duplicate payment is a major financial drain they face. 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. This will otherwise eat your margin and inhibit the financial progress of your company at the same time.
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 vital that the accounts payable team on lookout constantly and take the preventive steps to keep 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 steps below are going to help you tighten controls that surround invoice processing which will then allow you 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. On the other hand, you should know that there are some other activities which can prompt duplication of the vendor master file.
For instance, when the vendor invoice has entered into ERP system manually or automatically, duplicate vendor master file will be made if there’s a different vendor code that’s selected. 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The end goal here of duplicate payment audit is on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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. 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. When the vendor sends the original invoice, then there is a probability that a duplicate payment occurs.
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.