Accounts Payable News^®

Regardless of the type of organisation – if you process invoices – you are also processing duplicates. In the overwhelming majority of cases the percentage of duplicates made is very small, and can therefore seem like a slightly irritating, but unavoidable part of running an AP department.

However, when an organisation makes over £50m in annual invoice payments, that small percentage could translate as £50,000 per year. In other words, it’s likely that every year, the AP Manager is heading a department which is costing the organisation as much, if not more, than his annual salary!

And it’s not just organisations with sloppy accounting procedures which are exposed. In our findings, even those who run a tight ship can still run the risk of overpayments. While it’s likely to remain the case that duplicate payments cannot be eliminated, an organisation’s exposure to them can be significantly reduced by adhering to a handful of relatively straightforward procedures. In addition, by the application of best-in-class bolt on solutions, these errors can be picked up, prior to the payments being made. On top of that, solutions of the type built by FISCAL Technologies are virtually guaranteed to cover the cost of its software in its first run through the ERP system.

There are many reasons for making duplicate payments, but one of the most consistent is basic human error. When an organisation relies on a variety of staff to input data, or simply has an overwhelming volume of invoices to process, a total avoidance of error is impossible. Therefore, this is a fact which has to be accounted for within any AP department. In many cases it can purely be misrepresenting a zero with the letter O, or the figure I with the number one, or a space where there shouldn’t be one.

Most ERP systems are set up to recognise duplicates where the invoice numbers are the same, but a simple error as mentioned, can let these slip through the net unnoticed. And while some suppliers will return overpayments, others will not, or will take a long time to do so – destroying supplier relationships along the way.

The 10 Most Common Reasons for Making Duplicate Payments:

• Human error
• Use of temporary staff
• Mergers & takeovers
• Changes in supplier personnel
• Fraud
• Lengthy authorisation process
• Deliberate misuse of system controls
• Delays in paying suppliers
• Re-issuing an invoice too swiftly
• Changes in systems without proper training

In this more compliance led age, the introduction of new technology both to control the flow of the purchase to pay system, and to scrutinise the ERP for duplicate payments, can have significant and beneficial side effects. If your raison d’être for investing in new technology is simply to throw another rope of security around the system, you might be surprised to discover a number of other hidden benefits, such as more control and higher visibility. And we all know where there is visibility, those in charge of compliance are very happy indeed! So while we can accept that duplicate payments are probably here to stay, we don’t have to accept the volume which slip through, or that they cannot be almost immediately detected and retrieved.