Best Software Product – Enterprise Solutions at 27th Annual HYSEA Innovation Summit
Best Prepaid Card Solutions at IAMAI India Digital Summit, 2019
Best Prepaid Card of the Year At the 7th Edition of Payments & Cards Summit 2019
  • Redeem Zaggle Propel Card
  • Manage Zaggle Cards
  • Buy Gift Cards
  • We are Hiring!
company_logo
  • no_image Login/Sign Up
  • Gift Card Deals Gift Card Deals
  • Redeem Zaggle Propel Card Redeem Zaggle Propel Card
  • Manage Zaggle Cards Manage Zaggle Cards
  • Propel Propel
    • Overview
    • Solution
    • Pricing
    • Support
  • Edge Edge
  • Save Save
    • Overview
    • About
    • Contact Us
  • Select Select
  • Corporate Corporate
  • Contact Us Contact Us
  • Contact Us Blog
  • Products
    • Zaggle Propel
    • Zaggle Edge
    • Zaggle Save
    • Zaggle Select
  • Company
    • About Us
    • Team
    • Careers
    • Press
    • Contact Us
  • Blog
  • Gift Card Deals
  • Corporate Solutions

  • Cart
  • Login/Sign Up
Menu
Zaggle Blog
  • Sample Page
Zaggle Blog
Identify risk of duplicate invoicing

Identify the risk of Duplicate Invoicing and prevent them

Posted on November 27, 2020November 27, 2020

Duplicate invoice payments are pernicious. Research shows that around 3.6% of invoices manually entered include an error caused by data entry. On average, approximately 0.1% to 0.05% of invoices paid are typically duplicate payments. These could potentially, for a medium-size organisation with annual costs of $100 million, represent a loss of $300,000 over a three year period.

Most duplicate payments require extensive recovery audits in concert with time-consuming, labour-intensive manual processing. A small percentage of these come to light thanks to scrupulous vendors. 

Studies show that 64% of organizations still rely primarily on manual control testing to detect control violations such as duplicate invoice payments.

The Causes

  • Manual processing of a very high number of invoices at the same time.
  • Disparate options for receipt and payment of invoices
  • Lack of a structured system that allows personnel in the finance team to make payments 
  • Unscrupulous employees and vendors taking advantage of the lack of organizational policy

Most Enterprise Resource Planning (ERP) applications today can identify if an invoice entered into the system is similar to one previously keyed in. This is based on categories such as company, vendor number, invoice number, invoice date, and total amount against a prior invoice. However, variations in any of these fields would render most ERP applications incapable of identifying duplicates.

1. Errors in Data Entry

Data entry errors can occur due to myriad reasons, most of which are the result of manual processing. The most common keying errors include misreading characters, transposing numbers, leaving out leading or trailing zeroes.

Intentional errors are introduced when finance personnel do not follow regulatory guidelines. Altering an invoice number by adding additional characters is a common method used for duplicating invoices.

2. Automated Clearing House

Automating payments places the onus for making payments outside of the finance team often leading to duplicate payments. While most organizations set the framework for the finance team to work within, these are ignored.

The lack of an automated accounts payable system leads to insufficient documentation from the generation of an invoice to when the payment occurs. If these details are stored in disparate locations it leads to confusion on the protocol followed. 

With finance teams having to search through sources such as spreadsheets or email threads to identify errors; the audit becomes complicated and stressful.

3. Redundant Vendor list

No matter how comprehensive the vendor master list, duplicate vendors in an ERP system is unavoidable. 

Finance teams often take shortcuts while creating vendor entries. One such instance is if a vendor invoice is fed into the ERP system while selecting a different vendor code. Changing the code tricks the system into seeing this as a new entry. This usually occurs if more than one person handles data entry and if there are no clear guidelines on nomenclature.  

4. Manual cheque requests

Manual cheque creation with no numbered forms leads to cheque processors generating an invoice number. This is a fertile source of duplicate invoice numbers.

5. Multiple source documents

Using different source documents makes duplication frequent. If one document is in a different format than the other such as a statement, quotations and when it is coming via two different sources such as snail mail or email, it makes it doubly hard to track. 

These alternative sources are generally used for reminder purposes. Unless vigilant, they often lead to duplicate payments.

Another common reason is the lack of purchase order on the invoice. If one is not found, there is a delay in the entry of the invoice into the system. In the meantime, if the vendor hasn’t received payment, they might resend the invoice with the required PO.  This makes it highly possible that both invoices are processed and paid.

6. Reimbursing employee travel and expense

Employees requesting reimbursement for business-related travel and expenses incurred during the trip will follow protocol and send in an expense report. However, they might also be submitting invoices for payment. This again results in duplicate payments making it very hard to monitor as the total amounts are usually small.

Preventive Measures

  • Reviewing vendor master files consistently. Having guidelines in place to check and authorize if the vendor added is legitimate is essential. Differential access to edit the vendor details helps in managing the situation. 
  • Limiting manual cheque requests to only when there is no true invoice. Cheque request forms can still be completed and submitted multiple times. However, end-users should be trained to never submit the same cheque request twice.
  • Establishing a company-wide, standardized policy for how to number and/or name invoices. This policy should put forth clear, structured guidelines for 
    • The entry of an invoice number when one already exists
    • The rules for capitalization and punctuation entry 
    • Generating an invoice number when one doesn’t exist

The policy should first be enforced within the organization’s financial system. 

  • Adopting a payment policy that requires an official invoice with the presence of an invoice number, a reference to an order schedule, or contract number.
  • Implementing a continuous-monitoring tool capable of checking for duplicate invoices before a cheque run is processed. 

Zaggle Save

Zaggle Save is an all-in-one business spend management platform that helps in simplifying business payments through control and end-to-end visibility over expenses. This ensures that businesses spend smarter saving time, effort, and money. 

As an automated web-based solution, Zaggle Save is capable of detecting duplicate invoices from those submitted. This significantly eliminates the likelihood of fraudulent expense claims being processed and paid. 

Sign up today to start automating expenses for your company. Please feel free to get in touch with us if you would like to schedule a demo or if you have any questions.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Sold t-shirts at 16, cutting-edge digital spending solutions provider today
  • Business spends in the new normal
  • Best KPIs to measure the success of your channel partnerships
  • Managing remote spendings while maintaining team morale
  • Expert view on the changing role of the finance function in the digital era

Recent Comments

  • charisma on Engaging Employees through Rewards and Recognition is a Win-Win
  • florani on How to Manage Petty Cash for Business Expenses
  • sharmila on Engaging Employees through Rewards and Recognition is a Win-Win
  • Jessy on How to Manage Petty Cash for Business Expenses
  • Priya on How to Manage Petty Cash for Business Expenses

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • February 2019
  • July 2018
  • December 2017
  • November 2017

Categories

  • Uncategorized

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
©2021 Zaggle Blog | Powered by SuperbThemes & WordPress

    Our Company

  • About Zaggle
  • Careers
  • Press
  • Partner with Us
  • Contact Us

    Customer Products

  • Gift Card Deals
  • Zaggle Cards

    Products

  • Zaggle Propel
  • Zaggle Edge
  • Zaggle Save
  • Zaggle Select

    Information

  • Grievance Policy
  • Refund Policy
  • Privacy Policy
  • Terms and Conditions
  • FAQs

    Download Zaggle App

  • no_image
Subscribe to get the best offers!

Copyright 2020 Zaggle Prepaid Ocean Services Pvt.Ltd.All rights reserved