By Megan Doyle
Global business is also affected. Another report found that duplicate and erroneous payments are a particularly serious problem for businesses that pay international suppliers.2 This increased risk for duplication is likely due to inconsistent global payment processes, among other things.
Erroneous and duplicate payments can be the result of a variety of issues, some of which involve human error, while others arise from more complex internal business processes. Some of the common causes of duplicate or erroneous payments include:3
Fraudulent invoices can also lead to duplicate payments, but these instances are reported to be rare.4
It can be difficult for a business to detect a duplicate payment before the payment is processed, often because duplicates aren’t necessarily exact copies of one another. For example, duplicate invoices might have different dates or even different invoice numbers. This can happen when suppliers send both a paper and an electronic invoice, or if they re-send the same invoice after not having been paid by the agreed-upon date.5
In a perfect world, all vendors might notice duplicates and simply return the payment. But considering that some SMEs process as many as 450 invoices in a busy month, businesses might think about taking a proactive role in reducing the risk of erroneous payments.6
Experts say that the main way to detect duplicate payments is to audit the accounts payable (AP) department.7 This can be done internally by AP, itself, but that can prove expensive and inefficient—AP employees end up spending time searching for potential duplicates rather than doing their real job. Otherwise, businesses can outsource the audit to a third-party to detect, confirm, and resolve duplicates, but this can be just as costly.
In light of this, self-audit tools that continuously monitor AP processes are growing in popularity. This technology can be deployed to automate the detection process. While not perfect, observers believe that modern AI, machine learning, and data-analytics is making it easier and faster for businesses to identify, prevent, and even rectify overpayments.8 For example, AI, ML, and data-analytics can rapidly account for years’ worth of invoices, contact information, supplier contracts, and other relevant information.9
Experts note, however, that these modern systems are not yet perfect, because key payment information might be embedded within supplier contracts or conversational emails, and, therefore, can’t easily be identified and aggregated.10
In addition to tapping technology, there are a number of other best practices recommended by experts to deal with duplicate payments:
Duplicate payments can be both annoying and costly for businesses of all sizes. Unfortunately, with so many invoices and payments exchanged in the course of a month, they can be hard to detect. What’s more, duplicate payments can be caused by several things, from a simple typo to the more complicated issues that might arise during a software migration. Still, there are a number of best practices businesses can follow to reduce the risk of—and potentially avoid—duplicate payments.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. “How Much Money is Your Business Throwing Away in Duplicate Invoice Payments?,” Concur; https://www.concur.com/newsroom/article/how-much-money-is-your-business-throwing-away-in-duplicate-invoice
2. Mastering Cross-Border Supplier Payments, PayStream Advisors; http://info.tipalti.com/20170411-PayStreamCrossBorder_05.SSDownloadPage.html
3. “What Are All the Types of Duplicate Payments?,” nvoicepay; https://content.nvoicepay.com/blog/what-are-all-the-types-of-duplicate-payments
4. “How AI Catches Costly Overpayments to Suppliers,” Pymnts; https://www.pymnts.com/news/b2b-payments/2017/apex-analytix-archimedes-ap-audit-recovery/
6. “How Much Money is Your Business Throwing Away in Duplicate Invoice Payments?,” Concur; https://www.concur.com/newsroom/article/how-much-money-is-your-business-throwing-away-in-duplicate-invoice
7. “What Are All the Types of Duplicate Payments?,” nvoicepay; https://content.nvoicepay.com/blog/what-are-all-the-types-of-duplicate-payments
9. “How AI Catches Costly Overpayments to Suppliers,” Pymnts; https://www.pymnts.com/news/b2b-payments/2017/apex-analytix-archimedes-ap-audit-recovery/
12. “The true cost of duplicate payments—and how to reduce your risk,” CFO Daily News; http://www.cfodailynews.com/duplicate-payments-cost-risk/
13. “Tips for Stopping Duplicate Payments,” Technology-Insight; http://www.technology-insight.com/blogs/tips-for-stopping-duplicate-payments.aspx
16. Detecting and Preventing Duplicate Invoice Payments, Infor; https://pages.infor.com/hfe-white-paper-detecting-preventing-duplicate-invoice-payments.html