Duplicate disbursements are one of many types of overpayment errors that occur within the accounts payable management section. The Institute of Internal Auditors have found that duplicate payments make up between 0.5% and 0.1% of annual supplier invoice payments which means one in a 1000 bills could be a duplicate. If your company makes £50 million in annual invoice payments you are probably paying out £50,000 or more in duplicate payments per year..

How Do They Happen?

ERP or Accounting software should have the controls in place to flag, track or catch duplicate payments overpayments. Yet, the chance of human error means none of the packages are sophisticated enough to prevent more than about 70% occurrence. The Institute of Management and Administration acknowledges that “Completely eliminating duplicate payments using recovery audit software may be an impossible dream”..

Internal Audit

This problem issue can be resolved by carrying out out the next process :
1.) Obtain a file of the full payment history
The key data items which are required are Supplier Reference, Invoice Number, Amount and Invoice Date. Where appropriate, Purchase Order number can also be valuable.
-For convenience, and to produce a smaller number of suspected duplicates, it is often useful to split out suppliers such as landlords where the payments are always constantly the same identical amount.
-The data should include credit items. This will reduce the aggravation of finding large duplicate payments which have already been recovered with recovery audit software or where errors have been immediately reversed at the time of entry.
2.) Query the data using specialist duplicate-finding techniques or system.
-This will necessitate the use of a system that can identify recognise the items most likely to be duplicates.
-Query results should of course be listed in descending order of monetary amount and chance of being a duplicate.
3.) Trace suspected items back to their supporting documents using recovery audit software.
4.) Contact overpaid vendors, and ask for repayment or a credit note.
-This step may require some tact, but vendors are likely to be co-operative with their existing customers. Problems are expected when contacting former suppliers.

FISCAL Technologies is the only company to specialise in cost detection software. We empower Accounts Payable managers and have analysed client data from all the key financial systems and in 100% of cases we have discovered accidental overpayments that they were ingnorant of saved each many thousands of dollars. We offer a no cost duplicate payment health check and checklistto all qualifying organisations.

Please visit - www.fiscaltechnologies.com

This entry was posted on Sunday, January 6th, 2008 at 6:42 pm and is filed under Business Software, Software. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.