Duplicate Payments: Top Ten Reasons and What You Can Do 

The Top Ten Reasons for Duplicate Payments and How Your Staff Can Prevent Them

By Chris Doxey, CAPP, CCSA, CICA, CPC 

High volumes of transactions, increased levels of operational complexity, and an often diverse range of platforms and systems, make managing the Purchase to Pay (P2P) cycle challenging.  Understanding which transactions are critical to review for potential risk makes monitoring the accounts payable process even more difficult. Many controllers, chief financial officers (CFOs), and accounts payable professionals face these challenges with limited staff resources.  Ongoing changes to compliance regulations have further increased today’s organizational workloads.  I often see these scarce resources prioritized for system and automation implementations other than used for internal controls, testing, and reporting solutions.

Many of today’s systems provide matching and analytical functionality that often identify a duplicate payment, but might not dig deep enough to highlight all types of payment errors. In these cases, duplicate payments could still be made without taking additional measures. These measures include the ongoing review of key reports, together with focusing on the quality of your supplier master file which can be considered components of a P2P controls self-assessment program.

As additional considerations for your P2P controls self-assessment program and internal controls improvement efforts, here are the top ten causes of duplicate payments that I have identified as a result of several years of experience as a controller and working in the Procure to Pay (P2P) field.  The table below provides an internal controls matrix in which I identify the:

1st Column:      Accounts Payable Process Impacted: This is the specific accounts payable process in which a duplicate payment error can occur. The three main process areas are: 1) The Supplier Master, 2) Invoice Processing, and 3) P-Cards.

2nd Column:     The Risk:  Here are my “Top Ten Reasons for Duplicate Payments” organized by the accounts payable process impacted.

3rd Column:      What Your Staff Can Do: Here are examples of the controls and suggested processes your staff can implement to prevent duplicate payments and errors from recurring.

Click Here to View the Matrix as a PDF file.

Accounts Payable Process Impacted

The Risk:


Cause of the Duplicate Payment

What Your Staff Can Do:


Examples of the Controls and Suggest Processes

Supplier Master

1.   Duplicate Suppliers - Supplier name and address is duplicated for the same company, increasing the risk for a duplicate payment or a supplier coding error.


1.1   Implement Supplier Coding Standards - A lack of supplier coding standards may be one of the main reasons for duplicate suppliers. Coding standards include naming and field conventions for the supplier name, address, state, phone, contact name, and email address.

1.2  Identify Inactive Suppliers - The identification and periodic blocking or segregation of inactive suppliers increases processor keying speed, reduces errors, and will likely enhance system response time.  The recommended timeframe is to focus on suppliers with no invoice activity within the prior 18 months. This covers seasonality and retains those supplier that invoice once-a-year.

1.3  Remove Duplicate Suppliers - Duplicate suppliers are an exposure for any accounts payable organization, but represent an increased risk for an organization that has absorbed multiple locations and/or systems into a centralized operation.  Duplicate suppliers increase the likelihood of duplicate payments, and intensify the difficulty in compiling a comprehensive spend profile for supplier negotiations (i.e. “IBM”, “I.B.M.”, “International Business Machines”, etc.). 

1.4  Consolidate Multiple Remittance Addresses - Many of larger suppliers will have multiple remittance locations.  These addresses are often geographically placed to expedite the flow of funds into the supplier’s operation, or can be a function of the supplier’s ownership structure. Suppliers with significant remittance addresses often include those operating in the areas of telecom, waste management, industrial parts, post offices, and technology.

2.    Poor Segregation of Duties Controls - Without good controls and segregation of duties controls, employees could set themselves up as suppliers. This means that either supplier or phony invoices could be diverted to employees.


2.1  Perform an Employee Master Comparison against your Supplier Master - This analysis is often performed by internal audit departments on an annual basis. The employee master is obtained from the human resources department and compared with the supplier master file. The following fields are analyzed: name, address, TIN, EIN, SSN, and bank account. Any matches are investigated.


Invoice Processing

3.     Invoice Paid in Wrong Currencies - The invoice was paid to a company subsidiary in a currency other than USD creating a duplicate payment situation.  


3.1  Currency and Intercompany Rules -Ensure that accounting rules for intercompany and trade payables are enforced.

4.     Invoice Paid in Multiple Systems - Due to multiple ERP systems or AP locations, an invoice was processed and paid twice.


4.1  Duplicate Check Across Multiple Systems - Perform a duplicate check across if your company has multiple ERP systems and AP departments.

5.     Supplier Invoice Error - Supplier does business under multiple names sent duplicate invoices under both names. Both invoices were paid.


5.1  Updates to Supplier Master - Alert your procurement department to ensure that any changes to supplier names or “DBA” impacts are noted and reviewed for potential contact and purchase order impact.

6.     Invoice Coding - Keying an additional letter or number after/before on an invoice (e.g. 103207, 103207A).  Also, keying a 0 as a 0, or a 1 as an l, or a simple accidental transposition, can potentially lead to a duplicate payment, as the ERP system will not recognize this as the same.

6.1  Invoice Coding Rules - Establish and enforce a set of standardized coding rules for invoice numbers.  These rules should address the handling of leading zeros, spaces, dashes, special characters, invoices without true invoice numbers, etc.  Additionally, specific examples of overpayments should be shared with the invoice processing staff to demonstrate how critical their contribution is and the resultant cost impact of inconsistencies. 

7.     Coding the Invoice to an Incorrect Supplier - The same invoice number and invoice amount was paid to a different supplier

7.1  Invoice Coding Rules - Ensure that the accounts payable team is trained on the importance of coding invoices to the correct supplier. Specific examples of these supplier coding errors should be shared with the processing team and can be tracked as performance metrics for the overall team and as a means for continuous improvement.

8.     Inconsistent Invoice Amounts -This is difference in the invoice amount that was entered for payment vs. the amount of the actual invoice.

8.1  No Manual Adjustments - Review the current procedures for making manual adjustments to invoices.  The typical reason for the differing invoice amounts is manually excluding additional charges (e.g. freight/sales tax) on one submitted invoice but not on the other. 

9.     Offsetting Credit with the Same Numeric Amount - A credit memo is paid as an invoice.


9.1  Review Open Debit and Credit Balances - A credit memo may be issued because the client returned goods to the supplier, there was an over shipment of goods, there was a pricing dispute, a marketing allowance was issued, a duplicate payment occurred, the supplier was unable to apply the payment to the correct invoice resulting in a situation of unapplied cash, or an invoice was overpaid. These balances should be reviewed on a monthly to quarterly basis. Many companies perform an internal statement mailing process in which statements are requested from their top suppliers. Others use a third-party audit firm to assist with the process.


10.   P-Card Payment Invoice - Even though a supplier has been paid with a payment or procurement card, they may still provide an invoice for the transaction that is promptly paid, resulting in a duplicate payment. 


10.1 Annual P-Card and AP Payment Review - Conduct an annual comparison of accounts payable disbursements against P-Card payments to ensure that no duplicate payments have been made. Your P-Card provider can deliver the payment data to you and many third parties can assist with the review.  Some third-party firms have developed subscription fee plans to aid in the identification of duplicates between paid invoices and P-Card disbursements.


In summary, the dilemma of duplicate payments is not an easy one to “get your hands around.”  It involves a variety of controls, tests, and reviews to determine the best detective and preventive methodologies. An accounts payable review performed after-the-fact, by either your company’s internal audit organization or a third-party, can identify previously duplicated payments and provide a source of revenue since your company’s funds are recovered.  It’s worth noting that there are third-party firms who provide this work on a contingency basis, and new firms that provide reporting on duplicates on a subscription basis.

Click Here to View the Matrix as a PDF file.


About the Author: Chris Doxey has held senior finance and controller positions at Digital Equipment Corporation, Compaq Computer Corporation, Hewlett Packard, MCI, APEX Analytix, and BSI Healthcare. She has a bachelor's degree in English, a bachelor's in accounting, a master's in business administration, and a graduate certificate in project management.  As a management consultant, Chris uses her foundation of experience to provide best practices and solutions to her clients in the areas of compliance, auditing, internal controls, and fraud prevention. Chris also serves as the Executive Director of the Controller Certification Program for the IOFM.



Chris is a Certified Accounts Payable Professional (CAPP), holds a Certification in Controls Self-Assessment (CSA), is a Certified Internal Controls Auditor (CICA), and is a Certified Professional Controller (CPC). She has authored The Controller’s Best Practices Guide and The Controller’s Best Practices Guide to the Financial Close for the IOFM and IMA. Chris has also published two handbooks: AP Leadership Skills and Implementing a Controls Self -Assessment Program for Accounts Payable.  She writes articles, blogs, and whitepapers for professional organizations and solution providers.  She also provides several webinar and presentations throughout the year.



Chris is a member of the Institute of Internal Auditors (IIA), the Institute for Internal Controls (The IIC), the Institute of Financial Operations (IFO), and the Institute of Management Accountants (IMA). She is a board member of the IMA’s Ethics Committee and Research Foundation. She is also a member of the advisory board for The IIC and is president of the Washington DC area chapter The IIC organization.







Posted by Acculytic Friday, December 05, 2014 2:27:00 PM Categories: Accounts Payable Duplicate Payments Recovery Audit

Expense Management and Procurement 

Cloud Computing and the Future of Finance and Accounting

Things are changing quickly, and the rate of change is accelerating, this is not new news. Companies that are slow to adapt to new challenges exhaust their resources on outdated business processes.  New technology and faster computing are making it easier for solution providers to empower finance and accounting professionals with the tools to work smarter.  Those not looking at new ways of doing things may get left behind.

“The Cloud” is something many have heard about but not everyone knows what it is.  The cloud brings more flexibility to your operations, a decrease in cost, skilled customer service, and a constant torrent of new functionality. For the purpose of this article we will discuss “Software as a Service” platforms which are accessed in your computer’s browser.  Since the code of the software is hosted on another computer these types of solutions are considered cloud based software.

Here are some questions you probably want to ask yourself:

  • Do we use any software on a licensing basis?
  • How much are the servers that host this software costing us?
  • Have we looked at alternatives?
  • How much would we save in the long run by opting for a cloud based solution?
  • How much time and energy are we spending on upgrading our hardware/software solutions?

New ways of operating may seem daunting and change is usually not easy but weighing the options is vital.  Often the cost benefit analysis skews toward the cloud based option.  When it comes to accounts payable departments, business processes have to be well thought out and bottlenecks can be debilitating. When work piles up, tensions run high, and accuracy suffers. All business processes are important, but when it comes to accounts payable, any error requires a much larger increase in revenue to compensate.

Often accounts payable departments are left to their own devices and executive leadership doesn’t play a role.  Many organizations are realizing that their accounts payable department can be a profit center rather than a cost center and with that realization are beginning to direct more resources to improving how they pay.

Recently at the office, we discussed the future of cloud computing. Cloud computing is changing not only the nature of how we work, but also the job market in general.   From our perspective, the changes have only started.  To find out more check out “Cloud Computing” by Quentin Hardy.

Who is your cloud solutions expert? 

Organizations and internal teams often find their resources getting stretched thin.  This can lead to frustrations, yet this is exactly when professionals have the opportunity to really shine at an organization. 

Future leaders are those that can quickly learn about and understand newly available solutions.  That is why next time you’re thinking… “I don’t have time to learn and use this new technology” realize that doing so frees you up to be more effective and efficient.  The future isn’t about working harder but about working smarter. 

If you are interested in learning more about how technology is predicted to change society we have a book recommendation for you.  We enjoyed it and hope you do too.

Posted by Acculytic Wednesday, December 03, 2014 4:31:00 PM Categories: Cloud Computing Expense Management Procurement SaaS

Benchmarking Your Business Against Industry Averages 

How To Easily Find Industry Benchmarks (For Free)

Often company executives, accounting professionals, consultants and other business leaders are tasked with finding external financial data with which to measure company performance – benchmarking. Ideally, this benchmark data will be sector-specific.

Without relying on intuition or tarot-readers, companies regularly resort to hiring expensive research firms or buying subscriptions to cumbersome market analysis tools; but there is a free database with comprehensive industry statistics from companies in the US that is updated annually.


The Problem With Using Purchased Data

Even the most respected contract research organizations and purchasable reports only provide survey results. These surveys tend to have a small representative sample. With low response rates being one of the top challenges for researchers, landing 100-500 survey participants is considered a “good” sample. To get this level of participation takes time; and many firms may incentivize participation, which can skew results.

False respondents, limited response scales and interviewer subversion/distortion aside, the biggest issues concerning validity and reliability of survey results come from inaccurate responses. There are many factors that can influence survey answer reliability/validity from the respondent, including:

  • Subject bias
  • Differences in interviewers and interviewees interpretations, inferences, and connotations
  • Social desirability (spinning or falsifying responses to look good or providing an answer instead of saying “I don’t know”)
  • Recall fallibility/Inability to consult records

If Family Feud has taught me anything, it’s that when “we asked 100 Americans” something, someone’s answer will inevitably make Steve Harvey’s mustache twinge.

There are also a few sources of data for purchase online that pull statistical finance data without the inconsistency of survey data.

Additionally, both research firms and online industry analysis resources can take significant time/money investments to provide the benchmark data you need.


And Then There’s Free Data

If you happen to play in a commonly targeted or scrutinized industry like retail/wholesale, manufacturing, healthcare, government or education, you might get lucky and find a report or two online with benchmarking numbers that appear to be what you’re looking for. It’s important to note that, in addition to the shortcomings listed above, these reports are usually underwritten by a corporation with an agenda that can motivate biased results (whether surveys or data analysis).

Although financial statistics can easily be obtained online for specific companies; these profiles are generally for publicly traded firms, which can be valuable to a point. Unfortunately, calculating industry averages from this data would be extremely time-consuming and produce distorted results (a “peer benchmark” as opposed to industry average). Most mid-sized private companies would be hesitant to benchmark financials against public companies.


Don’t Get Me Wrong

All of the above resources can be extremely valuable for benchmarking. It’s important, however, to get a holistic view and to not rely on any single source.


Perhaps the Greatest Single Source of Free Financial Data

There is an organization that collects detailed financial information for virtually every US company. This organization deals directly with more Americans than any public or private institution in the world. This organization has a system of safeguards in place to maintain and enhance data accuracy. And this organization compiles and publishes troves of this data online, allowing you to drill down by sector or industry, location – all for free.

Wow, this organization must be one of the most loved institutions of all time!

This organization is The IRS. So, I guess it’s not technically free, but everyone can access its deep database and download without registering or providing payment information. Being a government site, it’s not exactly easy to navigate, but here is a good place to start:


By doing some simple math with tax stats from about 6 million active corporations, it’s fairly simple to get an industry average for anything on an income statement or balance sheet. For example, scrolling down to the “Minor Industry” section and clicking “Returns” gives you the ability to calculate the average Cost of Goods Sold (COGS) for Clothing and Accessories Stores to be $1.963M by dividing COGS of $101,744,741,000 (column 6) by the number of returns, 51829 (column 1)… or COGS as 52.8% of Revenue (column 6 / column 5).



For another, slightly more complex, example of how to use these free .csv files, check out our blog about using IRS Data for Accounts Payable Benchmarking


Friday, September 12, 2014 5:37:00 PM Categories: Benchmarking

Accounts Payable Benchmarking By Industry 

A/P Metrics with IRS Tax Data

Methodology Behind our Free A/P Duplicate Payment Rate Calculator

It is well known in the business world that if you don’t measure it you can’t track it.  This means that you can’t determine where you’re at or if you are getting better without measuring.  The question is – where do you start if you haven’t done an assessment before?  The answer – look to your industry for reference.

The IRS makes plenty of data available and by taking the average of your industries cost of goods sold along with other expenses you can get an idea of the disbursement benchmark for your industry.

Once you have this you can apply a duplicate payment rate to determine what you may be dealing with.

Organizations such as the Ardent Partners, Institute of Finance and Management (IOFM), Institute of Internal Auditors and many others all do research in the A/P realm and provide statistics to help businesses understand where other companies found themselves.


The Need to Convert Average Duplicate Payment Rates to Real Dollars

Because many of the tools we provide enable Controllers and Finance Executives to identify and recover lost profits from duplicate payments, one of our challenges had been articulating the potential ROI of the Acculytic service.

Granted, the real value of Acculytic comes from proving the use and validity of your A/P internal controls processes and systems – even the most elite of accounts payable departments are subject to errors and overpayments. “Cutbacks and computerization have slashed accounts-payable payrolls but also have cost companies billions of dollars in overpayments,” writes Lee Berton (of CFO.com, Bloomberg, Wall Street Journal).

Large organizations, often employing contingency recovery audit firms, have been well aware of the high costs of duplicate payments; but those with revenues below about $2B that are usually overlooked by contingency audit companies seem to underreport or be oblivious to their duplicate payment rates. Perhaps the widely accepted average duplicate payment rates of 0.5-3% don’t seem like enough to prompt action.  Our objective, then, is to show what that means in real dollars.


At First, this Seemed Pretty Simple

After comparing a number of research reports, we decided to go with the Ardent Partners’ metric of 1.07% rate of duplicates/overpayments for “Best-in-Class” accounts payable teams for a few reasons:

  • Freshness of data (2013)
  • Rate was in line with most other ranges reported
  • Solid research methodology and sample group
  • Publicly available info (AP’s New Dawn), so you can easily check our source
  • Gives us the ability to benchmark prospects against organizations with the most advanced accounts payable technologies (as opposed to companies not using things like eInvoicing, P2P, data capture, etc., for which Ardent attributes a 3.12% duplicate payment rate)

To get an idea of your annual duplicate payments, just take your A/P spend and multiply by the standard duplicate payment rate, right?



Payment Volume vs. Invoice Volume

Why not?

  1. Some of the business leaders we speak with don’t have an accurate amount for payables off-hand.
  2. Even if you did, that amount would include things like utilities and rent which really aren’t subject to overpayments. However, some reoccurring payments might still be duplicated.
  3. Then, there is the fact that the 1.07 - 3.12% duplicate payment rate is a percentage of invoices, not $.

This is going to be harder than I thought.

Four Smashed Calculators Later…


We created a way to calculate a dollar figure for potential recoverable cash from duplicate payments by industry and company size, and dubbed it the Typical Payment Slipups Report (TPS Report). The TPS Report is designed to be an easy-to-use Excel to quickly compute any organization’s likely duplicate payment amount.

First we had to get a great source of data from which to get an estimate of payables subject to duplication based on a metric that our business leaders would know. Because one of the pillars of our company is security (handling business’ financials in The Cloud requires an extreme commitment to privacy and security), we are restricted from using client and user data. Also, we really wanted a larger sample size by sector to provide a more relevant estimate.

Source Data

Our friends at the IRS were able to provide detailed consolidated income statements by industry. With a sample size of over 5.8M tax returns for the most recent year, we are confident in our ability to get a national average by industry. These tables from Returns of Active Corporations provided totals from income statements. Additionally, they gave us a detailed breakdown of their costs of goods sold, so we could extract only the disbursements subject to duplicate payment.

Estimated Expenses and Profit

Our TPS Report, with this IRS data, can now estimate a company’s annual expenses and profits, based on the average expenses indicated by tax returns in a specified industry sector, as a percentage of revenue. For example: A $100M retailer would expect to see a profit of $2.089M, on average, and $98.15M in expenses.

Estimated $ of Invoices through A/P Subject to Duplication

From there, we can estimate the portion of those expenses going through A/P that are subject to duplication. The TPS Report gets this portion of expenses (again, as a percentage of revenue) by adding repair costs, advertising and costs of goods sold not including inventory, labor, death benefits, and losses incurred.  Of course, there are other invoices going through A/P, but we don’t want to risk overstating. For our retail company above, then, we’ll see ~$62M in invoices going through accounts payable that are subject to duplication.

Projected Cost of Duplicate Payments

Now the fun part... To best project the cost of duplicate payments, we decided to make a couple of assumptions. First, we’ll consider you “Best-in-Class” as defined by Ardent (as mentioned above), and apply that lower 1.07% rate. Again, we wanted to err on the side of caution and presume that everyone we talk with has an enlightened accounts payable process and internal control system. Then, we’re assuming that larger invoices attract more scrutiny: Therefore, the assumption follows that all duplicated invoices come from the pool of 80% of invoice volume that account for only 20% of dollars disbursed (the 80/20 rule).  

This gives us a cost of duplicated invoices as 0.2675% of invoicing subject to duplication.

This rate was particularly satisfying as it fell in line with ranges reported by other sources – particularly the duplicate payment range cited in the 2013 IOFM AP Department Benchmarks and Analysis report.

So, for our retail company, with top-notch ERP and accounts payable tools, would likely experience an annual cost of $165,737 due to duplicate payments.

Accounts Payable Tools by Acculytic ROI Analysis

TPS Report Screen Shot

Action Plan

Now, armed with a defensible dollar figure benchmark, our retailer’s finance executives can justify a little digging to identify their errors. From there, analysis can help recover these lost profits. More importantly, this newly-empowered finance department can diagnose the causes of these overpayments and take steps to tie up many of those problem areas.

Though that $150,000-$250,000 in potential recoveries wouldn’t be enough to attract a recovery audit firm, there are many things that can be done. For example, developing or using a powerful analytical tool (hint, hint) to verify accuracy and help find duplicate payments could:

  • Immediately impact bottom lines
  • Provide evidence about the use and validity of internal control systems and procedure

Contact us if you’d like to play around with a copy of our TPS Report.


Posted by Acculytic Friday, September 12, 2014 4:48:00 PM Categories: Benchmarking

Accounts Payable Professionals - Are You Using Best Practices? 

Accounts Payable professionals who engage in best practices wanted! 

Acculytic is now providing an internal audit tool to Accounts Payable professionals.  The AP Portal, newly introduced by Acculytic in 2013, allows companies to upload their AP data and generate reports to find, recover, and prevent duplicate and erroneous payments.

You may do everything imaginable to prevent them but the harsh reality is that they can still slip by your preventative measures.  From duplicate vendor listings to human errors that foil data entry standards, a back-up plan is needed.

In the past, companies either opted to pay percentages of duplicate payment recoveries to post-audit firms or they attempted to tackle this difficult task with no outside help.  Often, without the proper tools, this process would prove frustrating and unfruitful.  This can seem like picking the lesser of two evils.

By partnering with Acculytic, you can find, recover, and prevent duplicate payments for a fixed fee.  Our Web-based transaction analysis tools allow you to benchmark your way to optimal efficiency.  From reports that enable you to clean your master vendor file to statistical analysis reports that detect fraud, these reports crunch the data and present only useful insights.

To see how simple this solution is, please watch the Demo Video.  We look forward to providing the tools for your success.

Friday, November 08, 2013 3:03:00 PM

White Paper Published 

"Duplicate Payments: Causes, Implications, Solutions"


Acculytic has recently published and made available a new white paper titled "Duplicate Payments:  Causes, Implications, and Solutions".   Supported with industry studies and statistics around the prevalence and occurrence rates of duplicates, this paper covers the waterfront on the issue and is an eye opener for midsize businesses. 

To receive this white paper, email john.flatley@acculytic.com or go here.

John Flatley


Friday, November 01, 2013 9:50:00 AM