How to Prevent Duplicate Payments in 7 Steps

Human error is one of the leading causes of duplicate payments, especially in companies that rely on manual invoice processing. AP staff frequently enter invoice details by hand, and even small inconsistencies can lead to duplicate entries. If an invoice number is slightly altered—such as “INV-5656” versus “INV5656″—the system may not recognize it as a duplicate. This can happen for a variety of reasons, including human error, system glitches, or a lack of proper controls in the accounts payable process. Duplicate payments can create financial and operational challenges that affect cash flow, reporting accuracy, and vendor relationships.

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Would-be scammers know this to be true, Bookkeeping for Etsy Sellers so they attempt to send fraudulent invoices hoping that the AP department won’t notice. Generally, most duplicate invoices aren’t born out of such nefarious circumstances. Instead, AP team members themselves might accidentally create duplicate vendor accounts and send payments to both. Duplicate payments can arise for many reasons, both unintentional and intentional. Identifying them early is the best antidote to this issue but requires the type of extra manpower that accounts payable teams rarely have available.

How to avoid duplicate payments in accounts payable?

However, after waiting for some time and not receiving payment, the supplier may send in another invoice for the same payment, probably with a purchase balance sheet order number this time. If not carefully checked, the accounts payable team may process both invoices and unwittingly duplicate the payment. After not receiving payment in time, the supplier might send a duplicate invoice for the same payment, leading to the accounts payable team processing both invoices. Insufficient processes, inadequate budget controls and human error are the most common causes of duplicate spending.

Pay your invoices promptly

• Manual entry mistakes during the invoice entry process are often the root causes of duplicate payments.
• Designed for growth-oriented businesses, Moon Invoice alleviates the burden of managing business finances.
• Organizations must regularly scrutinize their financial transactions to spot redundancies.
• This process often involves comparing invoice numbers, payment amounts, vendor details, and dates of transactions.
• Ultimately, the best system will use a combination of standardized processing procedures, internal controls, and a blend of automation and human oversight.
• In the real world, this could look like a company receiving two identical invoices for the same service or product, and mistakenly paying both of them.

They now route their invoices to a dedicated email inbox that automatically captures and processes them into a streamlined workflow. Today the company pays 90% of its invoices electronically, saving money for their team and strengthening vendor relationships. The importance of addressing duplicate payments lies in both the direct impact of financial waste and the indirect consequences such as damaged vendor relationships and compromised internal controls. As businesses grow and transaction volumes increase, the risk of such errors multiplies, making it imperative for companies to focus on prevention and resolution strategies.

• Preventing duplicate payments requires proactive measures and adopting best practices to streamline payment processes and minimize errors.
• As these slips bypass the usual checks and balances, they can result in unnecessary financial drains, posing challenges for AP teams and business owners.
• This positive reinforcement encourages vigilance and promotes proactive problem-solving.
• And with the built-in duplicate payment check, MHC NorthStar acts as yet another set of eyes for your AP team.
• By using invoice approval software, businesses can easily detect duplicate invoices and avoid making unnecessary payments.
• Initiating protocols for all staff to follow can help to prevent inattention and expensive discrepancies.

Financial Close Solution

• Poor AP workflow tracking and system inefficiencies also contribute to duplicate payments, especially when payments are made before invoices are recorded or when software fails to flag duplicates.
• Regular audits and continuous monitoring of AP activities can help identify and address any suspicious transactions, catching and preventing payment scams.
• Changes to processes and policies within the USPS in 2021 created longer delivery times for packages and mail across the United States.
• There is no single internal control you should have to prevent duplicate payments, rather, it requires many different internal controls to protect your government from these losses.
• These systems compare invoices and payment information against previous transactions to prevent duplicate payments from getting approved.

For example, if the procurement department doesn’t inform the accounting department that an invoice has already been paid, the accounting department might pay it again. If there is no effective system in place for tracking paid and unpaid invoices, it’s easy for invoices to get paid more than once. This can happen if an invoice gets misplaced and then resurfaces after it has already been paid. At worst, the double payment goes unnoticed or is caught later in a recovery audit.

If you have specific technical how to prevent duplicate payments accounting questions, submit them using our HelpDesk in the client portal. Additionally, a numbering system makes it easier to locate an invoice during an audit. Contractors who work for businesses typically use this form to verify their tax identification numbers (TINs), and your business will need those TINs when filing corporate tax forms. To fix this, set up consistent, standard labels for different types of vendor information.