How Duplicate Payment Audit Is Done?
To many organizations these days, making duplicate payment is a major financial drain they face. When you do pay for the same invoice twice accidentally, then you automatically lose money in that instance which is the reason why businesses need to practice duplicate payment audit. This will otherwise eat your margin and inhibit the financial progress of your company at the same time.
On average, there are around .05 percent of paid invoices made in error and for that, it result to a 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 – your accounts payable system or also known as ERP system must be designed to accommodate just 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.
Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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. 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. It isn’t bad to give out a check but problems do rise when there’s no appropriate backup for the said rush check or perhaps the info indicate that the vendor has already been issued a check. There’s a chance that duplicate payment occurs when the vendor sends the original invoice.
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.