If your business is processing less than 50 invoices a month, it is relatively easy for you to keep track of where and how your money is being spent. However, if the volume of invoices is more than 500 in a month, it’s overwhelming to track every single payment. If payments go unmonitored, they are more likely to become a cause of fraud or leakage.
You might have implemented internal controls to help prevent duplicate payments, but even then, you can never be 100% sure that such payments are not slipping through the cracks.
You might be thinking right now, “It will never happen to my business.” But, NEWS FLASH, most businesses who have been victims of duplicate payments and AP fraud probably felt that way too.
As per a study by AFP 2019, 82% of companies were targets of payment fraud.
But worry not, as a finance controller, you can always watch out for these signals to make sure no erroneous and fraudulent payments are flying under your radar.
5 signs that indicate your business is at risk of duplicate invoice payments.
1. Is your AP team manually processing a large volume of invoices at once?
If your team is processing hundreds of invoices in a day, the likelihood of data errors is very high. It’s humanly impossible to achieve 100% data accuracy given the sheer volume of invoices one person has to record and well as check manually. One might input the wrong alphabet or number, or miss adding an alphabet or a number, thus creating a duplicate record of the same invoice.
2. Do you receive invoices across different branch locations?
This case is pervasive among companies that have one or more branch offices. There can be instances where a vendor might send the same invoice copy to a branch office as well as to the head office, hoping to get paid faster. While this proves to be beneficial for the vendor, the company often ends up paying the same invoice twice.
3. Do you receive invoices via courier and also on email?
It’s not uncommon for vendors to send a hard copy of the invoice by courier and then send the soft copy of the same on email, to just remind your team that the invoice has not been paid yet. Invoices received from different sources may arrive at different times, and when they do, there is a high possibility of the payment being a duplicate.
4. Do you frequently review your vendor master file?
Another leading cause of duplicate payments is the possibility of having duplicate vendors in your Accounting or ERP system. Vendor duplicates are likely to occur if more than one person is entering vendor details into the system. Many organisations have certain internal controls in place to check and authorise if the vendor added by a team member is a legitimate one. The access to then edit the vendor details should be in the hands of the appropriate authority, so there is no mishandling of information. However, in a manual process, it becomes difficult to exercise such controls effectively.
5. Do you process your invoices and payments through different solutions?
One of the perennial challenges organizations face due to lack of an automated accounts payable system is proper documentation of the invoice to payment flow. Invoice details and payment details are stored in different spreadsheets. There is no easy log of who has taken action on which invoice. If payment is under dispute, finance teams may have to search through multiple spreadsheets or email threads to identify what went wrong; this makes audit stressful and month-end close cumbersome.
Congratulations! You’re 1 step closer to identifying AP frauds just by reading this article. Here’s the thing, not every company is the same. Different companies have different problems when it comes to AP fraud – manual processes, duplicate vendors, no clear separation of duties, lack of visibility, and more. All of these are just a few of the risks that may be sneaking along in your accounts payable department. And if unnoticed can affect your company’s growth in the future.
Happay Invoice, not only automatically detects and rules out questionable invoices, but also automates your entire invoice-to-pay workflow so that your processes are streamlined and prone to fewer mistakes. Happay Invoice offers an end-to-end solution for mitigating any kind of AP fraud risks.
Starting with Happay Invoice doesn’t require you to throw everything out and start from scratch. You can always add on to your existing process and enact changes one at a time.
Why we built Happay Invoice
Our mission is to help fast-growing businesses transform their accounts payable operations with modern technologies like AI and ML and, fluid friction-less invoice-to-payment experience.
Businesses using Happay’s Invoice & AP automation solution have seen a substantial reduction in invoice processing time and cost — reduced their exposure to duplicate billing & fraud and increased their AP team’s overall efficiency and productivity. Read more about Happay Invoice here.