However, this can be challenging to do, since many fraudsters leverage existing vendor and invoice data to create their scams. In fact, 58% of accounts payable teams were targeted via email scams in 2021. If AP teams pay these fraudsters by mistake, they will still owe the vendor money and will need to make that payment again. This kind of duplicate payment can be more costly, since the money paid to the scammer may never be returned.
- This can lead to multiple individuals approving the same payment, resulting in duplicate transactions.
- Automated workflows expedite decision-making processes by streamlining the flow of information.
- Provide additional training to employees involved in the payment process to ensure awareness of duplicate payments’ consequences and reinforce best practices.
- A duplicate payment is an additional payment made to a supplier that has already been paid.
It can reduce confusion and ensure that all invoices are processed in the same way. Resolving duplicate payments requires time and resources that could be better allocated elsewhere. The manual effort to identify, investigate, and rectify the errors can divert staff from more strategic tasks, causing operational inefficiencies.
Customization ensures 3 important tax dates you need to know for 2016 that the automation aligns with the unique requirements and workflows of the organization. This may involve cross-referencing payment details, invoice numbers, and transaction dates to ensure accuracy. Discovering the pain points in your accounts payable process is crucial, and errors can be minimized with accounts payable automation software. Procurement & AP automation software like Order.co creates maximum visibility in your invoice processing practice.
Automation systems often include robust security features to protect sensitive data. Role-based access controls, encryption, and secure authentication mechanisms contribute to maintaining data integrity and confidentiality. This standardization ensures that every instance of a process is carried out similarly, reducing variations and improving overall quality. Ease your reconciliation by pre-checking all transactions in QuickBooks Online from your connected platforms with Synder. Fortunately, that does not mean you have to accept a bloated, bureaucratic payment system. Additionally, a numbering system makes it easier to locate an invoice during an audit.
For instance, multiple AP clerks working on processing may duplicate a payment if there isn’t a clear process. If you must manually process, ensure that each invoice proceeds through a standard payment workflow (for instance, all invoices from a specific vendor going through the same clerk). Digital payments cannot get lost in the mail and all of their supporting information can be easily found with a centralized AP documentation system. By going paperless and streamlining your AP workflow, your team also reduces its risk of losing invoices.
Order.co centralizes and automates processing, making errors and fraud less likely. The accounts payable department in any company is a hive of activity, with a team of professionals working daily to keep the company’s financial wheels in motion. For example, MineralTree’s invoice capture and coding process has built-in duplicate invoice detection to automatically flag and stop any duplicate invoices. The tool immediately alerts AP managers so they can remove the duplicate invoices before they advance any further. You should include a standardized format for entering vendor names and invoice numbers to avoid confusion or errors.
Compliance & risk management
Overpayment can deplete financial resources, leading to a decrease in working capital. This, in turn, may affect liquidity, hindering the ability to invest in growth opportunities or manage day-to-day operational expenses. In this article, we’ll explore what causes duplicate payments, the problems they create, and practical steps businesses can take to prevent them. Plus, it’s likely to trigger a wider internal audit to see how many other duplicate payments might have gone out over the past year or more. No matter how it happens, paying a small invoice twice might not feel like a catastrophe, but tack on another zero or two, and those duplicate payments can be enough to keep a CFO up at night.
Inadequate communication can also lead to misunderstandings or misinterpretation of payment-related information. This can occur when important details, such as invoice numbers, payment amounts, or vendor details, are not clearly communicated or documented. If there is no effective system in place for tracking paid and unpaid invoices, it’s easy for invoices to get paid more than once. This can happen if an invoice gets misplaced and then resurfaces after it has already been paid.
Mitigating the Risk of Duplicate Payments: A Step-by-Step Guide
Your vendor’s AR team must also spend time getting the money back to your company in the form of a credit. It is advisable for companies to adopt procedures for promptly identifying and resolving any potential errors or discrepancies. Any suspicious patterns or inconsistencies that may indicate duplicate payments should be promptly addressed. Without timely notifications, individuals may inadvertently approve or process a payment that has already been completed. If there is a lack of coordination between different teams or departments responsible for payment processing, it becomes easier for duplicate payments to slip through. A duplicate payment occurs when an entity makes an extra payment in the same amount as the original.
How Synder helps prevent duplicate payments
Organizations relying heavily on manual payment processes are more likely to make duplicate payments. The manual entry of data and reliance on paper-based systems increase the chances of human error. Transitioning to automated payment systems can significantly reduce what is days payable outstanding this risk. When inputting vendor information into the payment system, human error can lead to mistakes such as misspellings, incorrect account numbers, or duplicate entries. If the organisation’s vendor database is not regularly updated or maintained, there may be outdated or incomplete information. For example, if a vendor changes their bank account details and the organisation fails to update this information, payments may be sent to the wrong account, resulting in duplicate payments.
It automates the manual data entry process, checks for invoice duplication, and registers each payment at the time it’s made, updating your books automatically. With the amount of work accounts payable teams have to get through in a typical day, it’s no wonder that duplicate payments make up at least 1–2% of all payments made by most organizations. Avoiding duplicate payments is imperative for an organization’s financial health and operational efficiency. Duplicate payments not only strain resources but erode trust with vendors. Payment discrepancies also undermine the accuracy of budgeting and reporting.
When you’re ready to make a payment, the platform offers several digital payment options, including ACH, credit card (whether or not your vendor usually takes credit cards), and international payments. With just a few changes to your business processes, you can improve your cash flow and better manage your expenses, especially when you remove inefficiencies at the same time. Invoice matching helps ensure that payments correspond accurately to a valid and unique invoice.
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