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Duplicate Payments: Understand and prevent them!

July 15, 2024

by

Jens Kettler

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SAPCompliance

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SAPsecurity

Prevalence and financial impact

Duplicate payments are a costly issue for many companies, often leading to significant financial losses. Here's a concise overview of the problem and solutions:

Duplicate payments can make up 0.1% to 0.5% of a company's annual disbursements, potentially leading to $500,000 to $2.5 million in losses annually for a company with $500 million in payments.

The common causes

  1. Invoice Errors:
    Vendors resend corrected invoices without cancelling originals. In our experience, errors in adding or not adding VAT and using the correct % is the single most common error.
  2. System Limitations:
    SAP ERP systems may not detect slight variations in invoice details. The standard SAP check for duplicate payments only works on exact matches e.g. for the gross invoice amount.
  3. Manual Processing Issues:
    Incorrect invoice numbers or duplicate submissions for reimbursements.
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High-Risk Areas

  1. Construction Projects:
    Multiple invoices for the same services.
  2. Consulting Agreements:
    Recurring payments like leases and subscriptions. Example: A company found it had paid several hundred thousand dollars in duplicate consulting invoices.

Preventive Measures

  1. Automated Systems:
    Implement automated invoice matching systems.
  2. Vendor Management:
    Regularly update vendor files and deactivate unused and duplicate vendors.
  3. Compliance and Monitoring:
    Enforce strict invoicing compliance and conduct internal audits.
BROCHURE – the benefits of our products!

remQ – Quick Assessment

The remQ Quick Assessment delivers tangible results on risks and potential financial losses within one day: we scan your business processes and uncover overpayments, lost revenue and other financial losses.

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How VOQUZ Labs top tool „remQ“ can help:

remQ is a powerful tool for detecting and avoiding duplicate invoices and other overpayments. It offers automated, continuous monitoring of business transactions in SAP systems, flagging suspicious activities and preventing financial losses. The software provides built-in controls for procurement, accounting, inventory, and more, ensuring compliance and reducing costs.

remQ’s duplicate payment and invoice analysis uses a smart matching mechanism and allows to match duplicate invoices even when they are from different but similar vendors, such as from ACME Corporation and ACME Corp. for example. It also covers varying invoice numbers, which is often the case when a vendor sends a new, updated and corrected invoice. Sometimes, incorrect invoices are not reversed and cancelled but still in the system. Also corrected invoices will have different (net) amounts, for example because a line item was changed/corrected.

So it is critical to apply a fuzzy or smart matching when comparing invoices and trying to match them. This is done automatically in the background, and possible matches of invoices create an alert in the system. remQ can even automatically block duplicate invoices so they cannot be paid until the case is resolved.

Other important checks that should be in place for accounts payables are also covered by remQ, such as vendor master checks, CpD payments, and checks of payment terms.

For more details, visit VOQUZ Labs remQ or book a demo by contacting labs@voquzlabs.com.

ABOUT THE AUTHOR

Jens Kettler

Jens has 20+ years of experience in SAP security, compliance and internal controls. He is an ex-auditor, always curious, willing to learn and to share knowledge. At VOQUZ Labs Jens is responsible for our risk and compliance products. He enjoys interacting with customers and finding quick and simple ways to improve our products to deliver value to customers. Pragmatic and customer-focused? Then Jens :)

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