Combat Duplication and Boost Accounts Payable Process

Today, an average organization processes around 400 invoices every month. There are chances that they are managing at least 2-3 duplicate invoices in the timeframe. The AP duplication leads to cash leakage for businesses with poor performers contending with 3% duplicate or erroneous B2B payments.

Even at the companies having problems under control, it becomes easy for the losses adding up over a year as accounts payable duplication can take place in insidious ways. Here we present some strategies to mitigate it, and check how cloud-based accounts payable system can help eradicate duplicate payments.

What is AP Duplication and its Causes?

AP duplication is the term which covers any aspect of the AP method that gets reproduced needlessly, from POs to supplier documents. Plus, it may refer to duplicate invoices/payments that occur often than employees think. It has been observed that above 55% of organization receive 29% of invoices more than once, while specifically 7% were receiving 78% of invoices submitted multiple times.

In such circumstances, duplicate submission takes place before the due date. And it generate enormous amount of additional work for the AP team members.

The common cause of AP duplication is that there is no specific way it happens. Rather, it is a multi-faceted issue. This signifies that suppliers may identify errors in invoices after they submission and choose to send a corrected invoice once again without cancelling the first invoice properly. At times, these invoices are sent electronically in addition to the paper invoices. But when they are sent to an incorrect place, the supplier relations will become frayed when the payments are delayed. Moreover, it will give them a reason to send another copy of the same invoice.

This duplication can also be related to technology. An ERP solution is at times equipped to flag the duplicate invoices. But these invoices need to be the exact copies. Changes in some information on an invoice like date or amount might read as a unique one.

Also, a few suppliers might deliberately make the changes to the invoices hoping to steal the amount by resubmitting. When an organization is not watching closely or leveraging a robust AP software solution, employees might get fooled easily.

Key Strategies to Mitigate AP Duplication

1. Keep a Close Watch Over Employees, Transactions, and Suppliers

Organizations can get into trouble when they have a massive invoice management volume per month and don’t take proper steps of checking if every invoice is valid or not. A few businesses wind up with bills where they aren’t sure of what services they are getting. Still they keep on paying.

This falls on the AP employees who are used to making payments to suppliers without questioning. Organizations also have to bear the responsibility. Above 50% of companies need three-way matching of agreements like POs, and receipts in order to prove transactional validity.

Organizations can set up for AP success and less duplication when they watch closer on what is happening with the payable team. It might seem to be time-consuming for humans to do it. But with AI and ML the work becomes easier and more effective, and that is what you receive with AP automation solution.

2. Invoice Compliance with the Suppliers

When left with their own devices, a supplier will do whatever they consider is the best to generate an invoice and make sure that they receive payment on time. The supplier might leverage an invoicing system and might craft custom invoice on MS Word or in an email body. Or, maybe generate a bill via peer to peer payment platform that offers basic invoice templates. This similar principle goes for the actual format of an invoice when it is submitted and the number of times it’s sent. Multiple suppliers will do different things.

But it doesn’t mean that organizations cannot strive for providers to comply with the businesses invoicing preferences. Organizations can minimize AP duplication by guiding suppliers towards invoice submission once, sending invoices to various teams, and leveraging constant invoice formats. Also, it’s acceptable to proactively handle with suppliers who are known to submit duplicate invoices. Such doing it innocently will appreciate the feedback. They will receive instructions on how and where to send the invoice only once so it is paid without delays.

3. Leverage Online Accounts Payable Software

The best way to combat duplication is via using automation of the AP platform. The software comes with in-built checks throughout an invoice processing lifecycle which can spot duplicates. Plus, it can aid in recovering previous needless payments by offering audit history for each invoice/action made on specific invoices.

So, the AP solution keeps the amount of duplication down by decreasing the time it takes for an invoice to get processed and paid. Instead of taking weeks or at times months, organizations can process the invoices in a few days with the software. The suppliers no need to wait for long time for payment when it’s expected in check form/card/ACH payment. Organizations will not miss out the duplicate invoices they were making the payment beforehand.