The New Accounts Payable Toolkit by Christine H. Doxey

Author:Christine H. Doxey [Doxey, Christine H.]
Language: eng
Format: epub
ISBN: 9781119700524
Publisher: Wiley
Published: 2021-04-13T00:00:00+00:00

Payment Processing There is no question that the lack of proper procedures around invoice receipt and approval lead to profit leakage through duplicate and erroneous payments. This is one reason third-party payment audits has grown into a billion-dollar industry. These firms are brought in by companies to comb through historical transactions and identify erroneous payments to suppliers, which they then try to recover.

Check Before You Pay. Prior to payment, all invoices should be checked against previous payments to ensure no duplicate payments are made. This means not just checking invoice numbers, but checking against a combination of criteria. For example, if the amount and date on two invoices are the same, it may be a duplicate even if the invoice numbers are different. If it's not possible to check every single payment, the AP department should at least spot-check a certain percentage of transactions each time payments are made.

Proactive Audits. Sophisticated invoice and payment audit technologies are now available as part of invoice automation solutions. Alternatively, a number of best-of-breed payment audit solutions that integrate seamlessly with numerous accounting applications are also available. These solutions run a variety of algorithms on the transactions to flag potential duplicates. Clients have the option of configuring the business logic, which will be applied to identify erroneous payments. On a periodic basis, a report is generated with potential payment errors, which need to be resolved before payments are made.

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