Duplicate payments can be among the most nagging issues for any A/P department. They take time and resources to research, yet the longer you wait to uncover them the harder it can be to recover the funds. Implementing a proactive approach to avoid the risk of duplicate payments can save your company thousands of dollars and many headaches!
It’s first important to understand the common causes of duplicate payments. One of the primary causes is that multiple people may be looking at paper invoices, and perhaps paper invoices are also being received electronically and thus entered into the system multiple times. More often, however, it can be an expense problem, especially if companies are not using electronic data interchange (EDI) systems. Finally, purchase cards can often add to the mix. If someone has expensed an item and an invoice is sent in separately, it is more likely to be input twice.
In fact, it’s the smaller duplicate payments that are most often overlooked. Companies will identify the larger-dollar instances, but the smaller payments can go un-noticed, which can add up fast if proper checks and balances are not put into place.
To proactively avoid duplicate payment headaches, here are five best practices to implement:
- Have a minimal point of contact. The less people that need to touch and approve physical invoices the better.
- Be organized and work to eliminate manual errors and typos. Simple typos on an invoice number or vendor name can easily create a duplicate payment that might be hard to uncover.
- Get automated. By reducing your paperwork through an automated PO process you can dramatically reduce your duplicate payment instances.
- Get your vendors set up through EDI. By making as much of the process electronic as possible, the automated systems can proactively find problems through a PO matching system.
- Have a third party firm that can consistently audit the data. Third party resources, especially ones that use technology to automate the recovery audit and duplicate payment processes, can dramatically reduce your time and resources. Often the return on investment can be nearly immediate and ongoing.
While it seems that duplicate payments should be the easiest credit recovery category to identify, they also account for a massive percentage of company over-payments. And left unchecked they can be nearly impossible to recover. The sooner you put duplicate payment best practices in place to eliminate future overpayment the better. And the faster you perform a comprehensive recovery audit of your existing A/P records, from the largest vendors all the way down to the smallest, the more likely it will be that you can recover money back to your bottom line in record time.
To find out how Lavante Recovery for Duplicate Payments can help you handle this process.