How can businesses avoid duplicate invoice payments?

When a business processes more than 100 invoices every month without any invoice management software, the odds of errors, fraudulent activities, and miscalculations are inevitable. One such misdeed that can bring a huge loss to your business is duplicate invoices and payments. On average, a business makes 0.1 to 0.5% of duplicate payments depending on their payment methods.

Whether it happens intentionally or unintentionally, the loss is on the business as they have paid the same bill twice. It’s very common, as invoices look alike and carry similar information. There are hardly any chances for them to catch your attention, if you are using outdated payment methods. Then how can you avoid duplicate invoices while taking care of invoice payments?

Five common duplicate invoice problems

Duplicate invoices happen due to various reasons. Here are the common mistakes that lead to them.

Manual data entry errors

Manual invoice processing is the foremost reason that causes duplicate payments to clients. A manual invoice process is when a company receives a paper invoice or prints it out and later enters the information into the system to send the payment. Entering the same data twice can be expected here, as they process multiple invoices simultaneously, and mix-ups can happen while handling invoices.

Manually entering invoices into the system is time-consuming and can lead to erroneous and duplicate invoices. If approvers don’t notice, the payment could get through, causing unnecessary trouble to vendors.

manual data entry errors

The vendor may send an invoice twice

Sometimes the vendor's system can be at fault too. If they initiate and send the same invoice twice, either through email or by mail, it can trigger duplicate payment too.

In general, the accounts payable department doesn’t go through them in detail except cross verifying them with purchase orders sometimes. But accountants can do nothing apart from this, leading to a faulty, duplicate invoice.

vendor invoice

Duplicate vendor

When your vendor works with more than one department of your company, they might raise invoices to all these departments separately. But what can go wrong and unexpected here is, sending multiple invoices to the same department instead of another one.

The accounts payable department is supposed to maintain a master vendor file for each vendor the company is doing business with. But under the above circumstances, it’s common for both the department and the accounts team to be negligible of the blunder.

duplicate vendor

Invoice canceled or adjusted

Vendors sometimes cancel the invoice after sending or resend the same invoice with a few altered columns. When invoices are sent through emails, they have no other choice than to send a new email with the updated invoice.

If the accounts team is not careful while documenting the invoice into the system, a very obvious double invoicing can occur. As few data fields are altered in the updated invoice, they can indeed be missed, even during the duplicate payments audit process.

This possibility of duplicate invoices is when the adjusted invoice is sent by mail. Due to the time difference, no one can identify duplicate reports in the future.

invoice canceled or adjusted

Not resolving the invoice dispute

There are times when either the vendor or the buyer has issues with the quoted amount or other fields in the invoice. If it’s not sorted right away, the chances are that the client might send the same invoice again, which will lead to double invoicing and thus double payment.

If there are invoice disputes or discrepancies in amounts, it has to be marked pending and immediately be notified to the vendor and the accounts payable department. But when this doesn’t happen, the invoice gets added to the pile of pending invoices, and you might pay them twice when the client sends the corrected invoice.

invoice dispute

Want to eliminate duplicate invoice payments?

Five simple steps to avoid duplicate invoice payments

In the above cases and other circumstances that lead to duplicate payments, the accounts team can certainly do something to prevent it. Here are the five steps to follow to keep this mishap away.

Monitor vendor details on a regular basis

Every accounting team should maintain a master vendor file for each vendor they are associated with. When the vendor files become clouded with old and new information, the chances of creating duplicate files for the same vendor are highly likely to occur. Every month, there should be time devoted to going through the vendor files, deleting old information, removing old vendor files, and updating the latest information. Duplicate vendor entry is when you see two different files saved with slightly modified names for the same vendor. Drop in an email or a message to all of your vendors to verify their current details with you and dispense their latest contact information.

Have all invoices in one location

Businesses still receive invoices through different sources and process them separately. Or they might store invoices of different departments or vendors in different sheets or locations. This is all okay until you bump into a similar invoice that you have processed a few days earlier and want to validate if it’s a duplicate invoice. Having all the invoices in one location gives you the privilege to cross-check and compare two invoices without having to fumble furiously. Apply some filters and make the search even shorter. Such modern functionalities are possible when you have implemented an automated invoice processing system.

Pay only when the invoice is correct

As simple as that. It can be non-viable to pause at every invoice, do manual verification and hold it to pay later. But this can help prevent faulty and fraudulent payments when invoices come with incorrect details. Develop a step-by-step process to guide your accounts payable department to work on invoice processing until the last step. Educating this way can make them aware of where to stop, where to proceed, and where to intimate the vendor. Rather than blindly clearing invoices one after another, verifying invoices in any means can avoid inconvenience for both involved parties. The verify-and-process approach simplifies the duplicate payments audit too.

Automate your manual data entry with the OCR

Manual entry is the birthplace of every mishap that can possibly happen while processing an invoice. Entering wrong details or feeding the same details again cause duplicate invoicing. These mistakes can sound too unprofessional when you have to explain to the vendor why this happened. Introducing a slight technical change, you can reverse the whole situation. OCR (Optical Character Recognition) is a technology that captures and reads the characters of the documents while scanning them. When your invoice processing system has this, all you have to do is just scan the receipts. OCR will capture the data and enter it precisely, saving time and your company's reputation.

Ask vendors to provide a purchase order number

Every time you make a purchase, an order number or PO will be generated and issued by the vendor. If they have an automated invoice generation system, this order number will be available there. An invoice verification can only happen when you have this PO number. Your accounts team can pull up purchase orders information from the records and execute their verification using this. If they don’t include this number in the invoice, it will take more time to narrow down and find purchase details. What’s worse is when the vendor assumes that it’s a payment delay and sends the same invoice again. To steer clear of this double invoicing, request your vendors to provide order numbers for each invoice.

How can Volopay help manage duplicate payments?

A glance through why the duplicate invoice issues happen can reveal the major roadblock, which is the lack of automation. When there is an automated workflow in invoice processing, it totally abrogates duplicate invoicing concerns.

No matter how many invoices you deal with, manual or semi-automated methods can still open doors for petty errors. But not invoice management software. From receiving invoices to making payments and syncing that to the main accounting system, automate everything.

Volopay allows you to customize your workflow for invoice processing or any business payment for that matter.

-You can see all the received invoices in one place and their statuses.

-Scheduling invoices ahead and bulk invoice uploading is possible.

-Allows you to receive/upload receipts that your accounts team can refer to anytime.

-Upload/add a new invoice in a few clicks.

-Ability to categorize invoices for different departments.

-Straightforward vendor file platform, which leaves zero chances for duplicate vendor account creations.

-Advanced features like automated invoice reception and OCR.

-It lets you ward off fraudulent payments and duplicate reports.

-All invoices are processed in one place for better visibility and comparison with one another.

You can leverage the power of automation to systemize one of the tedious tasks of the accounts payable department at such competitive rates. Along with invoice payments, you can enjoy other accounting functions like unlimited credit cards, reimbursements, and many more, all under one roof.

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