How to Mitigate AP Duplication and Improve Accounts Payable

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.

Basics of AP Duplication

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.

3 Strategies to Combat AP Duplication

The good news about AP duplication is that while it can happen lots of ways, it’s also not hard to counter it. Here are three tried and true strategies to combat AP duplication.

1.   Keep an Eye on Transactions, Vendors, and Your Staff

Companies can get themselves into trouble when they have a large monthly invoice management volume and don’t go through the proper steps of checking whether each invoice is valid or not. Some businesses wind up with bills where they might not even be sure of what goods or services that they’re receiving. Yet often, they’ll just keep paying.

Some of this falls on AP staff who get used to making payments to consistent vendors without ever stopping to question who these people are. Companies also bear responsibility. Stampli and Treasury Webinars’ report on AP bottlenecks found that only 51% of businesses required three-way or four-way matching of documents such as purchase orders, receipt reports, and invoices to prove transactional validity.

Businesses can better set themselves up for accounts payable success and less AP duplication when they keep a closer eye on what happens with the payables department. Watch transactions, the vendors and suppliers that companies work with, and even AP staff to ensure they’re looking out for possible duplicate invoices.

If it seems too time-consuming to have humans do this, more good news: Artificial intelligence and machine learning is arguably more efficient at this work, and that’s what you get with AP automation software.

2.   Enforce Invoicing Compliance with Vendors

Left to their own devices, a vendor will likely do whatever they think is best to create an invoice and ensure they get paid in a timely manner.

The vendor might use invoicing software. They might craft a custom invoice in Microsoft Word or in the body of an email. Or they might create a bill through peer-to-peer payment software such as PayPal, which provides basic invoice templates these days. The same principle applies with the actual format of the invoice, where it gets submitted, and how many times it’s sent in. Different vendors will do things in different ways.

That doesn’t mean, though, that businesses can’t strive for vendors to better comply with company invoicing preferences. Companies can reduce AP duplication by guiding vendors toward only submitting invoices once, sending invoices to certain departments or personnel, and using consistent invoice formats, such as a PDF.

It’s also perfectly acceptable to deal proactively with vendors who are known to submit duplicate invoices. Those vendors that do this innocently might appreciate the feedback. Those who keep sending in duplicates can be kindly instructed how and where to send a single invoice so it is paid in the most timely manner.

3.   AP Automation

The best strategy to fight AP duplication might be through automation. This is because AP automation software, as we’ll explore more in a moment, is designed with a number of different tools to eliminate duplicate payments.

The capabilities of cloud-based automation software continue to evolve, but even now, it’s known to be having a positive impact with AP duplication. Another 2021 survey report, “The How, the Why & the ROI of AP Automation” found that 23% of companies were receiving  fewer duplicate invoices due to AP automation.

In addition, AP automation software comes with built-in checks throughout the invoice processing lifecycle that will identify duplicates. . It can even help in the recovery of past unnecessary payments, by providing an audit history for every invoice and every action made on a particular invoice.

How Stampli Helps Fight AP Duplication with Automation

At Stampli, we understand implicitly how detrimental AP duplication can be to hardworking businesses. Here are some of the things our AP automation software does to fight duplication.

AI and Machine Learning to Detect Duplicate Invoices

Humans can catch duplicate invoices if they look closely enough, though it’s more work than necessary considering that artificial intelligence can do this.

Stampli comes with Billy the Bot, which prevents paying on duplicate invoices, by performing duplicate invoice checks during these two or three stages:

• Invoice is uploaded
• Invoice registration
• Invoice is exported to financial system using API integration

When an invoice is uploaded to Stampli, if an invoice has the same file name and size Billy will perform an additional check to see if the file content is the same against all uploaded invoices.

After an invoice is coded and registered, Billy checks the following data against existing invoices: invoice number, vendor name, invoice date, and total amount. If three of these items match an existing invoice, a duplicate invoice warning will appear

Human AP staff still has a place in all of this, by the way. They can come in to do high-level reviews of possible AP duplications, just only after Billy’s already done the groundwork.

Dedicated Vendor Portal for Invoice Submission and More

It can be tricky for vendors to know where or how to send their invoices which, as we noted earlier, can easily lead to duplicate submission of invoices. Stampli helps eliminate this issue since vendors can be directed to submit invoices directly to the Stampli system, which can also be configured to enter Stampli from a dedicated AP inbox that’s already in place. Moreover, a dedicated vendor portal where suppliers can see invoice status is a feature that can be enabled so suppliers can confirm the invoice was received, rejected, or processed.

It’s an easy process for vendors and companies alike. Vendors don’t have to question the status of their invoice or invoices. On the other end, companies also get a break on data entry, with Stampli automatically able to extract invoice data as it enters the system and even enter them into your company’s ERP software.

Fast Processing to Keep Vendors From Re-Submitting Invoices

Perhaps the greatest way Stampli keeps the amount of AP duplication down is by dramatically reducing the time it takes for an invoice to be processed and paid.

Instead of weeks or months, companies can process invoices in a matter of days with Stampli’s AP automation solution. Vendors won’t be waiting long enough to become anxious for payment if it’s expected to be in form of check, card, or ACH payment. And companies, for their part, will not even miss all of those duplicate invoices they were paying before.

Never pay a duplicate invoice again. Call Stampli today.