In part 1 of this Knowledge Nugget pitfalls of duplicate payments were discusses as well as items to consider when establishing data entry for invoices.


Here in part 2 we will consider best practices for avoiding duplicate payments.


Best Practices


Actively audit for duplicate payments
  • Consolidate data from as many payables sources as possible
Before any effective audit can be performed, access to all the relevant data is required. Consolidating data from as many resources as possible to a single reporting system will make audits efficient so that they can be done frequently. Software, such as Ariba Analysis, provides an analytic engine capable of reporting and comparing data across multiple data sources.
  • Create a formal process to audit for duplicate payments
If your volume of transactions is large enough, consider establishing an internal audit position that reviews for duplicate payments.
  • Focus the audits on the areas of best opportunity for duplicate payments
Auditing should be focused on large dollar invoices and high volume suppliers. When it comes to duplicate payments, not all transactions or suppliers provide similar opportunity for funds recovery. Develop some extra checking routines around large volume or high cost invoices to be completely certain a duplicate payment is not being made.
  • Check T&E sources for possible payments that might have been invoiced
Occasionally an employee will pay for something with a personal credit card (or cash) and request compensation on their T&E expense reimbursement report. Employees sometimes request reimbursements on the expense report and then submit an invoice for payment. T&E data sources should be included in any consolidated reporting database.



Segregate Suppliers with Differing Payment Methods

It is recommended that supplier processing be segregated by payment type. Suppliers should be set up with a separate post office box, email address, and Fax numbers for those vendors who you pay with credit or purchasing cards. Invoices sent to either location can be checked against credit card statements to ensure payment is made only once. Suppliers who have more than one payment method should have more than one supplier ID; each corresponding to the one of the different payment methods. These suppliers should have different contact information, but should have the same supplier parent for reporting purposes.


Consistent Business Processes Per Supplier

The trend is for companies to no longer enter invoices manually. The internet has made it easy for companies to use electronic invoicing solutions and other electronic means of transferring invoices. If a supplier is set up to process invoices via the Ariba Supplier Network (ASN), be sure that all invoices for that supplier go through the ASN. Key data elements, such as the suppliers invoice number, must be unique. The uniqueness of that number is a first line of defense against a duplicate payment when an invoice is sent both manually and electronically. Because of this, duplicate payments will slip through if there is no check for duplicate invoice numbers. Ariba’s P2P application requires that the combination of Supplier ID and Invoice number be unique for this reason.



Formalize Procurement & Credit Card Procedures

Credit card companies are pushing organizations to use procurement cards in their purchasing. Historically, company issued procurement cards were reserved for low dollar items but that is no longer the case. It is not uncommon for a company to require that all purchases under $10,000 be paid through a credit card. As the use of credit cards increases, we have seen a rise in the number of duplicate payments made where the item was paid via a credit card and then mistakenly pay the invoice sent by the supplier. If you are going to use a credit card for a supplier, be sure that every transaction for that supplier is placed on the credit card. Develop reports to determine which suppliers you have purchased items both on procurement card and manual invoice. This report should be reviewed and audited on a monthly basis.


Credit card electronic data feeds can be invaluable in capturing credit card payments before an invoice can be paid in error. These feeds can be sent as frequently as nightly; and the Level 2 and 3 charge formats can include invoice numbers. Issuing a purchasing card number should be coupled with the provision that an invoice number is required from the vendor on the credit or purchasing card transaction record. It is also possible to add the Purchasing Order number to the variable data length field in the card transaction feed.


It is often not possible to capture these numbers from the supplier; if so then purchasing cards should be limited to low value, less frequent supplier purchases so that the impact of duplicate payments can be lessened.


Separate the Purchase Order Processing from Receiving

Enforcing receiving prevents duplicate invoices by intercepting the over payment as an over receipt of goods. It is imperative that whoever makes the payment takes all the steps normally taken by in accounts payable. This means using the same rigid coding standards and distinguishing between the purchase orders (requester) and receiving documents (the re ceiver).




Next: Part 3: Process Standards for Minimizing Duplicate Payments

Part 1: Minimize Duplicate Payments



Beverly Dunn is a Customer Success Manager with Ariba. All customers are invited to join the private Customer Success group on Ariba Exchange, where you can access the Customer Success Spotlights, Lunch 'n Learn Webinar calendar and replays, and the Ariba Knowledge Nuggets.