Did you ever pay an invoice twice? Did you ever find out later that you did? According to the Institute of Internal Auditors, duplicate payments alone can account for up to 0.5% of total invoice payments. While many organizations rely on their default ERP duplicate checking capabilities to catch errors, these systems often rely on exact matching logic to spot issues. Did you know that Payments are only stopped when four data points line up exactly on separate invoices? If they don’t match exactly, the invoice is submitted for payment.
In today’s world, no one has time to manually review hundreds or thousands of entries in the general ledger line by line. As we all know, humans are prone to make mistakes, and processes get circumvented. This is bound to happen if a manual process is conducted. Mistakes happen, processes are bypassed, and duplicate payments can happen. With technology constantly evolving today, artificial intelligence (AI) software can help you see it all and resolve duplicates by:
- Detecting duplicate vendors based on names, addresses, tax ids, bank accounts, and other attributes. The presence of duplicate vendors in the vendor master is one of the top causes of duplicate payments.
- Identifying invoice and payment outliers by vendor based on amount, currency, and frequency. This could include invoices that are above average for a vendor, an increase in the volume of invoices, and invoices for rounded amounts, which are typical among fraudsters.
- Flagging out-of-sequence invoice entries and off-cycle payments, including weekend and holiday payments. When an invoice payment is off schedule, it typically warrants further investigation.
- Identifying missing or incomplete vendor data and flagging vendors with invalid or suspicious addresses. Correcting missing information can be the easiest way to cut vendor risk. It also pays to look for fictitious vendors, for example, vendors that match employee files.
- Highlighting vendor practices that create inefficiencies. By isolating root causes of errors, you can determine how to tighten controls and processes
Put the processes, policies, and controls in place to ensure better outcomes and manage risk more effectively and take advantage of all that technology and AI has to offer. #SpotthePatterns #Steerthefuture
Oversight is how finance organizations use AI to tackle hidden spend risk in everything from T&E and P-Cards to payables. Instead of manually auditing a small sample of past spend, you can automatically analyze 100% of your current spend and see the actions you need to take now.