Eliminating The Risks Of Invoice Duplication
Duplicate invoices can be a significant issue for the finance department of any company. There are many reasons why duplicate invoices may be presented. Some are simple mistakes by vendors or AP users, but others may be systemic problems such as an absence of controls or weaknesses in processing.
Some of the top reasons Accounts Payable (AP) departments receive duplicate invoices include:
- AP processing error – simple human error is perhaps the most common reason. Invoices may be mistakenly entered twice by accounts payable employees and they fail standard duplicate checks as the invoice number is entered slightly differently.
- Vendor processing error – from the supplier’s side, the same invoice might be duplicated and sent more than once by mistake. What’s really common is for vendors to send an invoice to the payables mailbox and another copy sent to the business user, which ends up being forwarded to the payables mailbox.
- Multiple invoice channels – where vendors send invoices through more than one channel, such as email, post, or electronic data interchange, AP might unknowingly process the same invoice more than once.
- Duplicate submissions – suppliers may intentionally submit duplicate invoices, either in an attempt to expedite payment or as a result of confusion over payment of original invoices.
- Weak vendor invoicing controls – from the supplier side, systems and controls with insufficient checks and balances may lead to duplicate invoices being issued and sent more than once by mistake.
To the uninitiated, duplicate invoicing may sound like it’s just a nuisance. However, way beyond simply adding to the administrative burden of the AP function, the risks it poses are far more serious and it is a priority for AP leaders to prioritize the identification of duplicate invoices.
More Than Just Adding To The Admin Overhead
When an enterprise AP department is processing hundreds of thousands or millions of invoices per annum the admin overhead and the cost of labor for dealing with it are substantial. But it also carries more serious risks that can fuel a range of problems that may constitute financial mismanagement. This includes:
- Financial loss – paying a duplicate invoice is essentially giving away money the business does not owe. If such errors do not come to light and financial adjustment is not made to refund or credit overpayments, this is a significant financial loss, especially for large companies.
- Cash flow and working capital problems – paying duplicate invoices may upset budgeting and impact cash flow and working capital forecasting, quite possibly impacting the ability to meet financial obligations, and inviting costs for servicing debt.
- Compliance and audit issues – duplicate invoices and overpayments, lead to inaccurate financial reporting and auditing. Non-compliance with financial regulations, such as those enshrined within SarBox related to invoice fraud, can result in penalties, fines, and reputational damage for the company.
More Effectively Managing the Challenge Of Duplicate Invoices With APMatching
Implementing a strong invoice approval process, purchase order systems, and training employees are all widely practiced to identify and prevent duplicate invoices from being paid.
However, by far the most effective way of managing the challenge is to use APMatching Software that comprises these three online tools:
- Invoice-Matching automates the processing of invoices. It identifies and resolves issues with invoices before posting invoices to the ledger without any manual intervention.
- Statement-Matching automates the reconciliation of supplier statements in all digital formats, including Excel and PDF, as well as paper hard copies.
- Duplicate-Matching automates the identification of duplicate invoices. It generates customised reports to help businesses better manage the prevention and recovery of duplicate invoices.
Take a personalised demo with one of our representatives, and we’ll show you how the software eliminates the tedious, time-consuming manual process that is widely practiced to match invoices.
If you like what you see, we’ll give you full support so that you can more fully evaluate APMatching with a Proof of Concept (PoC), demonstrating how effective it is using your own data.