The average company processes at least 500 invoices a month, and while some process more or less than the average, chances are they’re handling at least one duplicate invoice in this timeframe.
Accounts payable (AP) duplication leads to cash leakage for companies, with low-performers contending with as high as 2% duplicate or otherwise erroneous business-to-business (B2B) payments. Even for businesses that have the problem more under control, it’s easy for losses to multiply over the course of a year, with AP duplication able to occur in a number of insidious ways.
Join us today as we explore the basics of AP duplication, a few simple strategies to prevent it, and how Stampli can help eliminate duplicate payments with the aid of AP automation software.
AP Duplication, Defined
AP duplication is a fairly broad term that covers any part of the accounts payable process that gets unnecessarily reproduced, from purchase orders to vendor files. Most critically for businesses, it can refer to duplicate invoicing, invoices, or payments, which happen more often than people might think.
A report by Stampli and AP Now, “Common Invoice Problems: How to Deal with Them” found that 50% of companies surveyed were receiving duplicate invoices on a regular basis. More than one-fourth of companies received over 25% of their invoices more than once, while an especially unlucky 6% were getting 75% of their invoices submitted multiple times.
“In all of these cases, the duplicate submission happens before the due date,” the report noted. “As you might imagine, this creates an enormous amount of extra work for accounts payable departments.”
Causes of AP Duplication
The reason AP duplication is prevalent is because there isn’t just one way that it happens. It’s a multi-faceted problem.
Well-meaning vendors might spot an error in their invoice after they submit it and opt to send in a corrected invoice without properly canceling the first one. Sometimes, vendors might also email the same invoice to an incorrect department or multiple departments. Other times invoices are sent electronically in addition to a paper invoice, be it through the mail or enclosed with a physical good. “When invoices are sent to the wrong place, the vendor relations are likely to become frayed as payment is delayed,” Stampli and AP Now noted in their report. “This will also give them the perfect excuse to send another copy of the invoice.”
AP duplication can be technology-related, too. Enterprise resource planning software is sometimes equipped to flag duplicate invoices, but the invoices have to be exact duplicates. Change a few small details on an invoice, such as its number, date, or amount (by even a few cents) and it might read as a unique bill.
Of course, some less honorable vendors might make subtle changes to invoices deliberately, hoping to steal a second payment by resubmitting. If a company’s not watching closely (or using AP automation software, which keeps a solemn watch), staff can get fooled.
How Many Duplicate Invoices Get Paid
In March 2020, CFO Magazine reported some sobering statistics. It noted that at a median, companies faced 1.5% of their payments being erroneous or duplicate, while bottom-performers were at 2%. Even companies doing relatively well were still at 0.8%. This was also before the COVID-19 pandemic, which has witnessed increased fraud rates.
How often are companies paying duplicate invoices? A 2021 study by Stampli and Treasury Webinars, “AP Today: Bottlenecks, Benchmarks & Best Practices” found that 54% of companies were processing more than 500 invoices each month. That means that even the best mid-size or enterprise-level companies probably pay at least a few duplicate invoices every month. It also means that a median company might make 7.5 duplicate or otherwise erroneous invoice payments each month, or 90 for the year.
Thing is, there are tools and practices available that can bring this number down to zero.
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