Introduction

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When you're a business owner, one of the biggest challenges you face is ensuring that your money stays in the right hands. When it comes to payments, this means tracking down who has paid what and when. Duplicate payments can happen for a variety of reasons—and some are more common than others. If you have your accounting and contracts team set up on an approval process, you can get ahead of this issue before they become an issue at all!

Every organization is under a great deal of pressure to improve profitability and reduce unnecessary costs which hurt the bottom line of every company. One area that can be addressed easily and without cost is duplicate payments. While a huge portion of larger enterprises have made huge strides and improvements to accounts payable and audit processes which have reduced overpayments, the most enterprising organizations realize that you can never be perfect in any way with your current processes, and so should constantly be looking for new ways to add value to the business.

There are a few steps that any company can take in order to minimise the risk of overpayments or duplicate payments to any supplier or service provider. Here we are going to list a few garnered from decades of statement analysis and duplicate payment recovery.

The best practice in procure-to-pay involves going way beyond duplicate payments so as to not only reduce errors that originate within your accounts payable, but to find errors made by suppliers that may create circumstances for duplicitous payments to become more likely, such as submitting an invoice twice for the same service under two different numbers. With proper analysis of the sources of such overpayments, you can save more cash for your bottom line and save time on processing unnecessary invoices.

Investing company time and budget into projects of this nature do not cost a great deal to implement, and they are likely to pay off in less time than you might think:

• Automate every process that you can. Technologies such as e-invoicing, supplier portals and system generated remittances can make a big difference to reduce human errors that might occur from manual entry. You could also introduce electronic and scanned copies of invoices, rebates and warrantees into your system which will make it much easier to find money owed to you and can help  when you are recovering money owed to you from various different suppliers. Check to see if your ERP system can look for  duplicate payments off-the-shelf, and if your system is outsourced, ask them what the process is for checking against errors and duplicated payments.
• Master Data Integrity. Maintaining a high quality of Master Vendor Data often slides to the bottom of the priority list in organizations. However, good data is a backbone of good process and the ability to get things right the first time.  Poor vendor data can lead to invoices being sent to incorrect addresses, and often leads to payment errors, late payments or duplicate payments. Make sure someone in your organization is invested in owning the quality of data and is rewarded when it is improved and well maintained.
• Introduce Authorisation with a PO system.  One way that organisations can reduce KPI costs such as Cost per Invoice rate or First time Match, is when the Purchase to Pay department has implemented a coherent and inescapable payment verification checking process. As long as heads of department can circumvent checking procedures by flexing their muscles then you will never fully rid yourself of duplicate and overpayments.
• Make Budget Checks Mandatory. Every department head must understand where there money is going. If they overpay a supplier from their budget then they should notice as their budget will be short for other services and items. These budgets should be checked against supplier statements.
• Solicit statements from your suppliers. Supplier statements are vital. if you are going to perform any sort of audit on the costs of a project or integrate payments being made to a cross-checking system against your own accounts, you have to start with supplier statements. They are the only way to verify that you have received what you have paid for with each service provider or supplier and that nothing has been billed twice, over-billed or billed more than once. Nothing makes for a better business than charging for what you do not supply so you have to implement checks to protect your business and the value of that business.
• Never stop recovering credit notes. Most companies invest in third party audit recovery solutions once in a while, but you may still not be recovering the total number of invoices being overpaid. Credit notes do expire, and if there is cash that you are not recovering between audits, then no one will know how much balance you could be missing out since your last consolidation. Consider using a supplier statement review service to make sure that all credit notes have been collected and that your suppliers are up-to-date with all of your rebates and other payments. A supplier statement review can often be the most lucrative of all third party reviews, and it can only add to your bottom line.
• Conduct contract compliance reviews. When a new contract is signed, it is good practice to provide all vendors with written confirmation that their contract has been received so they know to begin sending invoices to you.
• Confirm that you have received contracts. This will provide your supplier with an official record in case there are any disputes and allow you to collect against any part of the compliance that a supplier has neglected or overlooked. When a new contract is signed, it is good practice to provide all vendors with written confirmation that their contract has been received so they know to begin sending invoices to you.
• Provide a deadline for the supplier to send their invoice. It's important that invoices come as soon as possible after an order has been placed instead of waiting until after delivery or acceptance of goods/services etc., otherwise they may be too late! You can also set up auto-payments through PayPal so there's no risk of forgetting about them if they're sent on time every month or two at most - which means less hassle when it comes time for payment again later down the line!
• Reconcile payments that were sent to the amount that was on the invoice. This can be easily done by creating a column in excel where you write down the amount paid and then compare it to the amount due. It is also helpful to have an organized listing of all invoices due by company so you will be able to know if an invoice from one company has already been paid or not. By practicing effective communication with your suppliers and properly reconciling your statements, you'll significantly reduce the risk of paying suppliers twice.

While there are many best practices you can follow to ensure there is no ‘leakage’ in your procure-to-pay process, there are other areas which are much more efficient to outsource. Activities such as soliciting statements and auditing your supplier base can often be done much more efficiently by a third party, keeping your resources laser-focused on the day-to-day and business-critical operations.

So when was the last time you investigated testing the integrity of your accounts receivable data? If your are under pressure to achieve more savings, and deliver a higher quality service, what are you doing to improve your end to end payments process?

Duplicate payments can happen for a variety of reasons. If you have your accounting and contracts team set up on an approval process, you can get ahead of this issue.

For example, if someone is overpaid by mistake and they don't realize it until they receive their next paycheck, they'll be unable to change their payment details at that point in time because they haven't been paid yet. The company will still receive the incorrect amount without realizing it until after all records have been updated automatically when paychecks are issued. This may lead to confusion when payments go out as well as cost both sides time and money trying to resolve the situation before something goes wrong with payroll or other financial transactions such as bills being sent late due to mistakes made during processing (such as not including important information). 

Duplicate payments are easy to make but they can be easily avoided with proper paperwork, organization and communication!

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Duplicate payments are easy to make but they can be easily avoided with proper paperwork, organization and communication!

• A common cause of duplicate payments is an error in the system. This happens when a payment is processed twice or more than once. If you have your accounting and contracts team set up on an approval process, you may notice this happening more often than expected.

• Another reason for duplicate payments is human error (e.g., missing deadlines due to technical issues). In order to prevent this from happening again in the future, ensure that your staff members have access to all required documents at all times so there aren't any delays in processing them through the system.*

By keeping a tight ship you can drastically reduce the number of duplicate payments being made and the number of credit notes slipping the net, but you will always do well bringing in a third party to perform a duplicate payment recovery audit as invoices are always paid twice. It is just part of running a large business.

How Can I  Prevent Suppliers Rushing Through Invoices by Threatening to Cease a Service?

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Preventing suppliers from rushing through invoices by using threats to cease a service requires a strategic and diplomatic approach. Here are some steps you can consider taking to address this situation effectively:

1. Open Communication Channels - Maintain open lines of communication with your suppliers. Establish a rapport where both parties feel comfortable discussing concerns and issues.

2. Understand Their Perspective - Take the time to understand why the supplier is rushing through invoices. Are there financial pressures or operational challenges on their end? Understanding their perspective can help you address the root cause.

3. Negotiate Realistic Timelines - Collaboratively negotiate realistic invoicing and payment timelines. Make sure the terms align with both parties' operational needs and cash flow requirements.

4. Implement Clear Payment Terms - Clearly outline payment terms in your contracts to set expectations from the outset. Ensure that both parties are aware of agreed-upon payment schedules and penalties for non-compliance.

5. Leverage Technology - Implement an efficient electronic invoicing and payment system. This can streamline the invoicing process and reduce the urgency of rushing through invoices.

6. Regular Review Meetings - Conduct regular review meetings with your suppliers to discuss invoicing, service quality, and other aspects of the partnership. This demonstrates your commitment to maintaining a healthy relationship.

7. Address Quality Concerns - If the supplier is rushing through invoices due to concerns about service quality, address these concerns promptly. Collaborate to find solutions that ensure consistent service delivery.

8. Offer Early Payment Incentives - Provide incentives for early invoice submission and payment. This can motivate suppliers to adhere to agreed-upon timelines without resorting to threats.

9. Mediation or Escalation - If the situation escalates, involve a neutral third party to mediate the issue. This could be a trusted industry association or a mediator experienced in business disputes.

10. Contractual Clauses - Include clauses in your contracts that protect against sudden service cessation. These clauses could outline the steps that need to be taken before service can be terminated and provide a reasonable notice period.

11. Diversify Suppliers - Consider diversifying your supplier base to reduce dependence on a single provider. This can give you more negotiating power and flexibility.

12. Legal Advice - If threats of service cessation continue, consult legal experts to review your contracts and advise on potential legal recourse.

Remember that maintaining a healthy supplier relationship is crucial for your business's success. Approach the situation with professionalism, empathy, and a willingness to find mutually beneficial solutions. Strive for collaboration rather than confrontation to create a win-win scenario for both parties.