The Costly Risk Of Neglecting Duplicate Payment Detection
DUPLICATE PAYMENT DETECTION
businesses make countless disbursement payments each month, and many organizations overlook the risk of making duplicate payments without an automated system in place. Accounts payable automation software can help identify and prevent fraudulent payments and reduce the risk of duplicate payments, both of which protect companies fiscal health. Failing to use such system incurs numerous risks that could easily negate the cost savings associated with not using the software.
The first and foremost risk of neglecting duplicate payment detection involves misspending of funds, problem that can be both very challenging to identify and costly to correct. This occurs when employees process multiple payments for the same purchase or invoice, or when single purchase or invoice is inadvertently paid more than once. All too often, these duplicate payments go unnoticed until the money is already misspent. In this scenario, the organization incurs the cost of the misspending, plus the cost of auditing the affected accounts and correcting the errors.
The next risk of not using an automated accounts payable system relates to companies ability to identify errors in payments. payment not made in the right amount, to the right vendor, at the right time, and with the right bank account can harm vendor relationships, create delays in payment, and result in assessment of late payment fees. Furthermore, organizations are increasingly subjected to more stringent governmental regulations that require greater oversight of financial transactions, introducing further risk to the payment process.
Lastly, not using automated software exposes companies to potential fraud from malicious actors. This is especially true for companies without robust internal controls that would otherwise catch those fraudulent payments. Criminals often target areas of implausible oversight, such as duplicate payments or payments to vendors with similar names, as these types of mistakes can go undetected for extended periods of time.
The risks inherent in not using innovative accounts payable technology to protect against missed payments, double payments, and fraud are substantial and can result in an organizations financial loss. Moreover, the manual effort associated with auditing, verifying, and documenting payments can be time consuming and inefficient, thereby consuming corporate resources that could be better utilized elsewhere. Investing in software solution, such as accounts payable automation, is essential to the ongoing financial health of any organization.
