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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. This will otherwise eat your margin and inhibit the financial progress of your company at the same time.

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 integral that the accounts payable team to be on the lookout constantly and take the preventive steps in keeping 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 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 – 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, there are other activities that may 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. This new file and code will then be attached to same vendor that has the same or possibly different bank details.

The aim of duplicate payment audit here is focused on eliminating outdated information, removing duplicate vendors and possibly sending letter to all vendors requesting them to confirm their contact info.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 – as a matter of fact, in avoiding making duplicate payments, this technique of duplicate payment audit is very important. 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. By the time when the vendor sent the original invoice, there’s a chance for duplicate payment to occur.

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.