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Duplicate Invoice Payments: Why They Happen and How They Can be Avoided

Duplicate Invoice Payments: Why They Happen and How They Can be Avoided

According to Infor, approximately 0.1% to 0.05% of invoices are paid twice. These are called duplicate payments, where a company pays a supplier more than once for the amount owed.

These double costs can significantly damage a business. Firstly, it negatively affects the company’s bottom line, and additionally, resolving the issue may also require extra costs, such as expensive recovery audits and overtime for the staff.

Read on to know why duplicate invoice payments happen and how to avoid them.

Why Duplicate Payments Happen

Duplicate payment of invoices may occur intentionally or unintentionally. There are several causes of duplicate invoices, some more easily resolvable than others.

Lack of Standardisation

For any system to work, rules have to exist. If a company doesn’t have standard operating procedures (SOPs), it’s easy for employees to feel confused and make mistakes. Not having a centralised database of invoices may make it hard for the team to determine which ones have been settled.

Relying Solely on Manual Testing

Many organisations still rely on manual control testing to spot duplicate invoices and other issues. Yet, it may still be challenging to detect some mistakes – one may see 0 instead of O or read 12 instead of 21.

Multiple Copies of Invoices

Suppliers will send  the invoice  when goods or services have been provided. Many companies also send copies of the invoice after the due date as a reminder. This may cause Accounts Payable teams to think it’s a different invoice and pay it by mistake.

How to Avoid Double Payments

One may assume they can rely on a vendor’s goodwill to report and return the payment when a duplicate one is made; however, this is rarely the case. Spending time on prevention and organisation is better than spending extra time and money fixing the issue.

Maintain a Centralised Database

Setting and maintaining a centralised database that contains all information about invoices and vendors is a must! It will ease the work of all employees and make it easy to track what has already been paid. Another way is to implement consistent labels and markers to clarify any confusion.

Speak to Vendors

Vendors often send bills through all available options – mail, fax, and email. Sorting bills from different sources will only cost you more time and effort. So, communicate with vendors clearly – tell them to send the invoice through one of the options.

Ask your vendors to avoid sending duplicate copies, as doing so can cause a delay in payment.

Get a New AI-based Software

Advanced invoice intelligence software can help optimise invoice management, from automating processes to spotting payment risks and detecting duplicate payments. Remember that a basic ERP may not be as effective as the new AI-based software, and a best of breed ERP bolt-on will eliminate the manual work.

Xelix: The Solution to Duplicate Payments

Although they may seem like minor issues, double payments can cause serious trouble for a company. The best and most efficient way to avoid them is to use AI-powered invoice management software which automatically detects and flags duplicate payments. This is where Xelix can help you with the Protect module.

We are the world’s first accounts payable control centre that can help you detect threats or errors in your transactions, audit your invoices, and more.

Contact us to learn how our technology can help save you the trouble of duplicate payments.

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