In many cases, seconds are great. Second chances at love, second helpings at dinner … But second payments to vendors? Not so great.
You know duplicate payments are more than just an annoyance for your finance staff. They can add up to five-figures going down the corporate drain each month, revealed SAP Concur.
Their research found that the typical small/midsized business (SMB) processes 450 invoices a month and has a 1.29% duplication rate – resulting in about six duplicate invoices a month. Since the average amount on those invoices was $2,034, SMBs are looking at about $12,000 lost per month if each duplicate invoice is paid. And the larger the company, the larger the loss.
It’s time to plug that corporate drain.
Keep an eye on …
Here are four areas you’ll want to watch to prevent duplicate payments at your company:
1. Your master vendor file (MVF). First things first. You can’t talk duplicates without mentioning the importance of a pristine MVF.
You likely already instruct your staffers to review your MVF file on a regular basis and look for spelling errors, missing information, repeat entries, etc. But to make it more manageable, you may want to try rotating the task among staffers, so no one person gets burned out or frustrated. (You’ve probably seen firsthand how frustration can lead even good employees to breeze through tasks without giving them enough time or attention.)
And if you haven’t done so in a while, it’s worthwhile to check that everyone managing the file – from your own staff to purchasers down the hall – is following the same formatting guidelines and rules.
2. Check requests. Employees aren’t always the most patient when it comes to getting the orders and expenses they need. They may submit a second check request if the first isn’t acted on immediately, and that opens the door to duplicate payments.
Spread a reminder companywide: Employees should never submit the same check request twice. And lay out the consequences for doing so.
You may even want to tell A/P to keep track of employees who they know have this habit, so they can keep an eye on their requests and address problems directly.
3. Invoice and payment methods. Another common cause of duplicates: Vendors send the same invoice or A/P sends the same payment via multiple channels (snail mail, email, portal, etc.).
That’s why with each vendor, you know it’s beneficial to have just one method for invoice submissions and one method for payments.
It’s a good idea to work closely with the head of Purchasing to ensure details of invoice and payment delivery are addressed in vendor contract terms.
4. Transitional times. During big changes, it’s easy for information to get recorded twice or invoices to be paid both on the old and new system.
So remind staffers to be even more wary of duplicate payments anytime your company’s going through a software upgrade, a process change, a merger or an acquisition.
