Small and medium-sized businesses dealing with duplicate payment isn’t a new issue but something that highlights ongoing business struggles to tackle long-term issues, which could otherwise lead to financial loss. Especially for accounts payable (AP) teams managing high invoice volumes.
One small yet costly mistake of making duplicate payments and your relationship with a supplier or vendor hangs by a thread. This could be because duplicate payments, once made, only put your business in disputes, resulting in the loss of both time and money.
So, what can be done to prevent such issues? Replace the entire AP team or change the payment method? Well, that’s too old-fashioned. According to business experts, you should get the right automation software that doesn’t compromise efficiency and accuracy, helping you save time and run a profitable business.
Did You Know?
84% of companies that switched to partial automation witnessed a growth in savings and efficiency.
Moving on, let us dive deeper to find out what duplicate payment means and discover steps for duplicate payment prevention.
Key Takeaways
- Duplicate payments are accidentally sent money twice for the same invoice or bill. If not addressed, they may disrupt your cash flows.
- Manual data entries, system malfunctions, and communication gaps can lead to duplicate payments.
- Increased visibility in invoices, online payments, and the use of an automation tool like Moon Invoice are effective ways to avoid duplicate payments.
- Moon Invoice aids businesses with high-quality invoices to prevent duplicate payments and help them get paid quickly via 20+ online payment modes.
What are Duplicate Payments?
Duplicate payments refer to multiple payments that have been processed accidentally two or more times by the business’s accounts payable department. They are considered overpayments that were unintentionally made for the same invoice or bill.
Duplicate payments can result from transferring the same amount mistakenly to another bank account via electronic transfers or issuing similar checks twice.
They arise because of technical errors in processing the digital payments or potentially due to human errors. The AP team must identify duplicate payments during the audit process. Otherwise, businesses may face issues in case disputes arise for duplicate payments. Or even worse, it may lead to unexpected money loss.
Get Rid of Duplicate Payments With Error-Free Invoices
Create professional and error-free invoices with Moon Invoice and eliminate the risk of duplicate payments.
How Duplicate Payments Occur
Below are some reasons responsible for causing duplicate payments. Let’s check them out one by one.
1. Manual Data Entries
If your business still relies on generating spreadsheets with manual data entry, duplicate payments are likely to occur. No matter how carefully you enter invoice details, you can’t eliminate duplication whenever human intervention is needed. Such repeated invoice entries will further increase duplicate payments.
2. Communication Gaps
A lack of communication between your accounts payable and accounts receivable teams can also lead to duplicate payments. If you haven’t centralized your invoicing data, chances are the accounting team may process the same payment twice. So, bridge the communication gap between internal teams, or else duplicate payments may occur frequently.
3. Paper-based Invoicing
How many times have you found it difficult to read handwritten invoices? Often, right? Such is the case with your accounting team, who usually fail to read the invoicing amount clearly and eventually pay it twice. The reason is that handwritten invoices have no proof of whether they are paid or not.
4. System Malfunctions
Electronic funds transfers via peer-to-peer apps can also lead to duplicate payments due to minor glitches. Sometimes, a payment has been made but isn’t reflected in the receiver’s account, encouraging the payer to make a second payment attempt and inadvertently resulting in a duplicate transaction.
Ways to Prevent Duplicate Payments
Let’s explore the effective ways to combat duplicate payments in accounts payable.
1. Enhance Invoice Visibility
If duplicate payments are causing headaches, then consider switching to paperless invoicing, where invoices offer improved visibility. The clearer your invoices are, the fewer the duplicate payments. Apart from visibility, invoices are stored digitally in financial records, meaning you don’t stay in the dark about the payment status.
2. Reduce Manual Dependencies
Ditch the conventional way of creating invoice reports on paper or maintaining spreadsheets that require manual intervention. This will lessen your duplicate transactions so that you can contribute more to other important business tasks. Plus, your accounts payable teams will no longer face burnout from constant manual checkups.
3. Prioritize Online Payments Over Checks
Give importance to online payments rather than just relying on the paychecks. This will not only wipe out the duplicate payment issues but also help you in combating fraudulent activities. Since fraudsters mainly target checks and duplicate payment problems remain a concern, prioritizing online payments would be a smart move.
4. Embrace the Right Automation Tool
Switch to online invoicing software like Moon Invoice to issue a professional-looking invoice and get rid of duplicate payments as well as late payments. Invoices generated using Moon Invoice are so clear that there is no chance for identical payments. The invoicing software helps you maintain an accurate financial report, offering a magnified view of paid and unpaid invoices.
💡Pro Tip:
You can set invoice tolerance limits in the automated accounts payable system to flag duplicate invoices, even if they have small differences.
The Ending Note
Duplicate payments are simply roadblocks that may hamper your business growth and add unnecessary burdens to your accounting teams. Once a duplicate payment is made, you need hours to recover the money that was unintentionally sent to the recipient.
Your team gets burned out quickly, impacting your overall business productivity. So, it’s better to use the aforementioned ways and avoid duplicate payments.
Remember, if you often encounter duplicate payments, an automation tool like Moon Invoice is the only solution you need. You can create attention-grabbing invoices, encourage your clients to pay quickly, and completely get rid of duplicate transactions.
Utilize a 7-day free trial to experience its go-to invoicing and payment solution for businesses like yours.
Duplicate Payments FAQs
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
