Duplicate invoices pose a significant risk to the finance department of any company.While some duplicates result from simple errors by vendors or AP users, others stem from systemic issues, such as inadequate controls or weaknesses in processing.
Top reasons accounts payable (AP) departments receive duplicate invoices
- AP Processing Error – Human error is the most common reason. Invoices may be mistakenly entered twice by accounts payable employees and they fail standard duplicate checks as the invoice number is entered slightly differently.
- Vendor Processing Error – On the supplier’s end, the same invoice may be sent more than once by mistake. A common scenario is when vendors email the invoice to the AP mailbox and also send a copy to a business user, who later forwards it to the AP mailbox.
- Multiple Invoice Channels – When vendors use multiple channels (such as email, post, or electronic data interchange) to send invoices, AP may unknowingly process the same invoice more than once.
- Duplicate Submissions – Suppliers may sometimes submit duplicate invoices intentionally, either to expedite payment or due to confusion over whether the original invoice has been paid.
- Weak Vendor Invoicing Controls – Suppliers lacking robust controls may inadvertently issue and resend duplicate invoices due to insufficient checks and balances.
To the uninitiated, duplicate invoicing might seem like a minor annoyance. However, beyond adding to AP’s administrative burden, duplicate invoices introduce risks that AP leaders must address as a priority.
More than just an administrative burden
In enterprise AP departments processing hundreds of thousands or even millions of invoices per year, the administrative and labor costs for managing duplicates are substantial. But more importantly, duplicate invoicing can lead to issues that may constitute financial mismanagement, such as:
- Financial Loss – Paying a duplicate invoice is equivalent to giving away money that the business does not owe. Without detection and adjustment, these overpayments can lead to significant financial losses, especially for large organizations.
- Cash Flow and Working Capital Issues – Duplicate payments can disrupt budgeting, cash flow, and working capital forecasting, potentially impacting the ability to meet financial obligations and increasing debt-servicing costs.
- Compliance and Audit Concerns – Duplicate invoices and overpayments result in inaccurate financial reporting and auditing. Non-compliance with regulations, such as those outlined in Sarbanes-Oxley (SarBox) concerning invoice fraud, can lead to penalties, fines, and reputational damage.
Effectively manage duplicate invoices
While implementing strong invoice approval processes, purchase order systems, and training employees are all common practices to prevent duplicate payments, the most effective solution is leveraging Basware software:
- Invoice-Matching – This tool automates invoice processing, identifies, and resolves issues before invoices post to the ledger, eliminating the need for manual intervention.
- Statement-Matching – Automates the reconciliation of supplier statements in digital formats (such as Excel and PDF) and paper hard copies.
- AP Protect – Offers finance leaders a comprehensive solution to combat duplicate payments, errors and risk of fraud, ensuring optimized working capital and healthier cash flow.
Automated accounts payable with Basware
For organizations processing streamline AP processes, reduce manual tasks, and free up resources for more complex work. Ready to improve your AP operations? Contact us to explore our invoice automation solutions.