Sachin Sharma explains why companies processing 400-500 invoices monthly still pay the same supplier twice. Three fixes: centralize invoice capture, match purchase orders to receipts and invoices, and let teams query suspicious ones. Vendors often submit near-duplicates with slight variations that slip through without automation.
When I ask controllers if they ever have made duplicate payments, generally the answer is no. Our process is pretty well designed and when you look more closely in the last 12 months of data, you will find multiple duplicate payments. That is a very common case with growing companies that are processing over, I would say 400 to 500 invoices a month. Your AP team is busy keeping up with the increased volume and they don't have really have time to kind of scrutinize every invoice. And on top of it you have a manual invoice process. So in this video I'm going to talk about how an AP automation solution can help you prevent those duplicate payments from happening and stick till the end where I will talk about a concept of near duplicates which might be causing chaos with your cash flow. Let's jump in if you're joining me for the first time. Welcome. My name is Sachin Sharma. I am the founder of Procare Desk where we help growing companies eliminate duplicate so supplier payments. So let's talk about different strategies. So number one is a common problem is that manual blind spot. Let's say, you know, we'll take construction example. You have project managers out in the field creating purchase orders. You have AP has their own inbox for processing the invoices and the supplier might be sending the same invoice to the project manager or sending to AP and just getting processed. The the same invoice is getting processed multiple times. Since the process is manual, you don't have a centralized system to capture all the invoices. So number one strategy is to first of all centralize the invoice capture process so you don't have to rely on project managers to receive the invoices. It should come to a single inbox. So even if you're manually processing the invoices, you at least have one place to kind of look at versus multiple places which increase the risk of duplicate payments. Number two is not having a three way match safety net. Now I've talked about three way match in multiple videos but I'll, you know, just briefly talk about this too. You're matching your purchase order with the receipts and invoices and if you're not doing that today, you might be paying vendors who have not either delivered the product or you are paying the same invoice multiple times. Here's what happens when you don't have three way match. Invoice comes in, somebody process it, route it for approval. The person who's approving it is busy in the field. They have probably Seen the same invoice multiple times, but they just might think, oh, maybe I missed it. Approve it again. And it happens so many times because you're not matching it against the document. Now imagine invoice comes in and you're matching it with the purchase order and receipt. And it tells you and says, hey, this invoice is already processed. You shouldn't be processing again. And no matter how different the invoice number might be, it'll capture that error and have somebody look into it. Right? So you can easily resolve exceptions like that. Number three is poor communication between departments. What typically happens is departments are not talking to each other, right? Project managers are busy in the field. AP is sitting in the corporate office trying to process those invoices and so on. But imagine if you have one system, one collaboration tool for everybody to look at. They can easily raise questions, ask questions to each other, and say, hey, I'm seeing this invoice. Similar invoice. I've seen this previously. Is there a reason the vendor should be sending us this invoice again? So just by increased collaboration and having one system for everything, make sure that everybody is looking from the same page. And you can eliminate any duplicate payments before the payment is actually made to the vendor. So those are three simple strategies you can implement, and that's how API automation can help you with reducing duplicate payments. Now, let's talk about the bonus tip is the concept of near duplicates. So a lot of time when we think about duplicates is in the form of, oh, it is the exact amount. But that's not what generally happens. We see vendors sending invoices with a dot 1 dot 2 or a at the end or B at the end. Right? So that's one way to kind of think about it. But number two is sometimes the invoice amount might be a little off. Now, I'm not saying that the vendors are approaching this by, like, with the intent of, you know, creating fraud. I think sometimes their internal processes are also broken. Right. So then you need to kind of go back and look at why they're sending that invoice twice or slightly differently. But the easy solution to fix all this is match it with the purchase order. If you're doing a match with the purchase order, you would know what already is invoiced against it. And if the same invoice is sent multiple times, because eventually it will go over the PO amount. And now somebody needs to look at it. It's easy to identify and easy to fix. So just to do a recap Here are the three simple strategies. Avoid the manual blind spot. Have one place to receive all your invoices, Implement a three way match process and have that safety nest Number three is Avoid poor communication between departments. Have one single place for everybody to collaborate. If you like this video, go hit the subscribe button and thank you for joining me today and I'll see you in the next video.
