The Importance Of Duplicate Payment Audit
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.
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.
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. There are other activities on the other hand that might 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. 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Well, the major goal of duplicate payment audit is centered on removing duplicate vendors, eliminating outdated information and sending letter to all vendors requesting them to confirm their contact info.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 – as a matter of fact, in avoiding making duplicate payments, this technique of duplicate payment audit is very important. The main reason for this is that, there are other vendors that request for rush check to which it is often issued with a 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. There’s a chance that duplicate payment occurs when the vendor sends the original invoice.
What the accounts payable team do in their duplicate payment audit is ensuring that there is a solid backup and also, the payment info is immediately entered to the system upon the check is issued.