Avoid the expensive error Finance is most vulnerable to in July

Your finance staffers watch for duplicates and other payment slip-ups all year long. But why should they be especially cautious this month?

July represents the peak time of year in terms of invoices processed, according to research from Concur. And it was during July that the most duplicate invoices were found, which can lead to major (often undetected) financial loss for your company.

To avoid errors, your staffers need to know the top reasons duplicates occur and get out in front of them. Pass along these three common causes of duplicates today:

1. The master vendor file

Your master vendor file is chock-full of info, so duplicate vendor entries may sit there unnoticed until they spur duplicate payments. That’s why it’s a good idea to:

• Remove inactive vendors. An 18-month timeframe is long enough to retain vendors that only invoice once a year, but short enough to avoid a cluttered master vendor file. Whatever timeframe you decide on, make sure it’s spelled out in your policy and well known amongst finance and purchasing staffers alike.
• Consolidate multiple remittance addresses. Some vendors may have multiple remittance locations, so A/P can end up sending the same payment twice. Have staffers take a second look at these entries and always consolidate when appropriate.

2. Invoice data entry

It’s easy for staffers to mistake a “1” for an “I,” or forget the leading zeros in an invoice. But that again can lead to payment errors. Of course, the first step is making sure your company’s operating under clear formatting standards for dashes, spaces, etc. Then you should also:

• Promote continuous training and awareness. Use real-life examples of duplicates and overpayments to show your staff the true impact of a tiny slip.
• Track staffers’ performance. If you’re able to implement a process or tool that monitors specific staffers’ actions, it could inspire them to be more careful when keying data.

3. Card payments

You’ve heard the old story: Your company agrees to pay a supplier or contractor via card, but they still send an invoice. That can all too easily spur duplicate payments. Here are proactive and reactive tips:

• Clarify and document vendor payment methods. Remind A/P that if you agree to pay a certain vendor via card, pay only by card so that vendor never has any reason to send an invoice. And check that the payment method is spelled out in your contract terms, too.
• Conduct an annual review of card payments against other payments. This will help ensure that no duplicate payments were made. And if you find any duplicates were made, your finance staffers can work to recover that money.