AP teams upgrade to S/4 HANA for improvements in performance, automation and invoice processing. As they evaluate their tech stack and prepare to migrate, many teams assume this upgrade will also include better controls against costly errors like duplicate and overpayments. Our research shows that isn’t the case.
We analysed our customers' data — both pre- and post-S/4 HANA migration — and we found a consistent truth: even the most modern ERP systems, including S/4 HANA, still need additional control layers to catch errors that can slip through the cracks.
In this article, we’ll break down why this is the case and how Xelix plays a vital role in ensuring your AP team catches those mistakes before they cost you.
We analysed data directly from our customers’ ERPs, including those who have already transitioned to S/4 HANA, and compared the number of payment errors we found. Our data set included 1.2 million+ invoices across an average of 25 months. We found that despite the advanced capabilities of S/4 HANA, duplicate payments and invoice errors still exist.
On average, duplicate payments amount to 0.2% of spend per customer.
The chart below shows the % of spend an average company will find in duplicate payments (this includes companies with varying levels of AP controls) compared to the % of duplicates present in our customers' data, looking at S/4 HANA and other ERPs. We can see that even after invoices have gone through S/4 HANA, there is still 0.22% of spend present in duplicates. So, let's say a manufacturing business using S/4HANA spends £8 billion annually, the data shows they should expect to lose £17.6 million to duplicate payments.
The chart below shows the % of invoices containing duplicates for the average company (this includes companies with varying levels of AP controls) compared to the % present in our customers' data, looking at S/4 HANA and other ERPs. Similarly to invoices as a % of spend, we can see that S/4 HANA still does not manage to catch a higher volume of duplicate invoices than other ERPs.
Another area is invoice errors, such as errors in vendor, tax, currency and more. We did similar research and found that invoice errors still slip through the cracks for organisations across all ERPs, including SAP S/4HANA.
The chart below shows the % of invoice errors that occur for an average company (this includes companies with varying levels of AP controls) compared to the % of invoice errors in our customers' invoice data, looking at S/4 HANA and other ERPs. S/4 HANA only manages to cut the rate of invoice errors present in other ERPs in half, leaving a significant number on the ledger.
SAP S/4 HANA improves visibility, reduces manual effort through automation and enhances financial controls. However, when it comes to preventing duplicate or overpayments, S/4 HANA isn't a comprehensive solution out of the box.
Here are a few reasons why:
S/4 HANA is prone to certain limitations when managing complex transactions. For example, vendor data may be inconsistent across systems, or vendors may invoice multiple times for the same delivery or service, which is one potential reason for duplicates.
S/4 HANA can’t always account for vendor-related issues, such as differences in invoice formats, ambiguous reference numbers or slight variations in vendor names. These discrepancies can confuse automated matching systems such as S/4 HANA and allow errors to go unnoticed.
Even in the age of automation, human errors still have an impact. AP teams may manually input or override certain data points that disrupt the matching process, leading to duplicate or overpayments.
In most organisations, S/4 HANA doesn’t operate in a vacuum. It’s often integrated with multiple other systems, such as procurement, inventory or third-party payment processors. These integrations introduce additional points of failure for errors to surface where S/4 HANA alone may not be able to detect or prevent them.
This is where Xelix comes in. Our solution is specifically designed to work alongside and complement your existing ERP system, including S/4 HANA, to catch errors that other controls might miss. Here’s how Xelix adds value:
Xelix can detect duplicate payments and overpayments based on a variety of factors, including invoice amounts, tax discrepancies, payment to wrong vendors and more. In fact, Xelix’s AI monitors over 400+ data points per invoice and employs over 50 machine learning models to accurately surface payment issues, reducing false positives (which ERP systems surface a lot of). These more advanced methods allow us to cast a wider net in our duplicate monitoring, which allows us to spot more duplicates without flagging these false positives.
Our platform can automatically cross-check vendor records to identify potential discrepancies, whether due to variations in name spellings, invoice references or other inconsistencies. We can also do this across multiple systems, whether that's across different ERPs, an upstream and a workflow or across two different upstream systems. This reduces the chances of missing a duplicate payment due to vendor data issues.
Xelix bolts on to SAP S/4 HANA and other ERP systems, providing an additional layer of control without disrupting your existing workflows. This makes our platform easy to implement and ensures that your team doesn’t have to manage another siloed system.
Payment errors are a consistent challenge for any business. A single duplicate can lead to unnecessary losses, and overpayments can strain cash flow and relationships with vendors.
More and more, organisations understand the need to proactively monitor transactions and prevent these errors from happening in the first place. They’re moving away from costly recovery audits and instead finding smarter controls.
The problem is that many think an upgraded ERP will lead to sufficient controls. Even with sophisticated ERP systems like S/4 HANA, the complexity and volume of transactions of bigger businesses cause these errors to continue.
We can see from our own customer base that even the most advanced ERP systems won’t catch all duplicate payments and overpayments.
AP teams that have transitioned to S/4 HANA still need an additional set of controls to catch those errors before they cost you. By integrating Xelix into your AP processes, you can ensure your team has the best tools available to prevent costly mistakes and maximise efficiency.
At Xelix, we enhance your AP controls and protect your bottom line, regardless of the ERP you use. We’ve supported a number of customers such as Kraft Heinz and EG Group through S4 HANA migrations, giving them control and visibility in a high-risk period.