Since January 2020, all businesses in France selling goods or services to a public-sector organization have been obliged to invoice electronically. This obligation will gradually be extended to the French private sector between 2023 and 2025. The implementation of automation has brought about changes in accounting departments over recent years. However, while this digital transformation brings many benefits, . Despite the watchful eyes of their accounts departments, double payments are a fact of life for all businesses, as the results of Profit Recovery audits inevitably show.
The commonest causes of double payments
Double payments occur when the same invoice is entered into an accounting system twice, causing two payments to be made to the recipient. The most frequent cause (36%) is an identical duplicate invoice. Their similarity makes them easy to detect by in-house people, with the invoice number, amount, date and the supplier details all absolutely identical. The difference between the two records in the accounting system will therefore be found elsewhere, such as the accounting journal used, or the two invoice recipients being in two different business units. An ERP system will usually detect them automatically and can block data entry on the second invoice.
However, a duplicate can also arise when a difference creeps in between the four fields that typically serve to identify a transaction (invoice number, amount and date, and the supplier number). These cases are more difficult to spot. The commonest errors are:
- Different invoice numbers with a character dropped or misread by optical character recognition (OCR) software - e.g. the digit “0” and the letter “O” are easily confused;
- Different identifiers: duplicate suppliers can be created if they change their name, or if they are trading under a name that differs from their registered name;
- Mistakes or mix-ups over digits when entering amounts can also give rise to an invoice being entered twice.
- Different invoice dates: when the due date is entered instead of the issue date, for example, or if the supplier sends a duplicate invoice with a different invoice date...
Liquidity gains and smoother processes - the benefits of profit recovery
A comprehensive audit to recover double payments to suppliers
The audit uses data mining techniques, and takes place in stages, during which all accounting data are processed, with no initial focus on particular errors.
In the first stage, millions of accounts payable accounting records are sifted through algorithms to highlight potential supplier over-payments. In the second stage, each irregularity spotted by the data mining software is examined by Runview’s consultants, who are experts in detecting double payments. The list of actual duplicates is then sent for ratification by the company’s in-house team. If the client company so wishes, it is also possible to entrust collection of the overpaid sums to a dedicated Runview collections team, who will act mindful of the ongoing relationship between the client and its suppliers.
In conclusion, the audit and the recovery of double payments deliver an immediate cash-flow boost. In addition, profit recovery fees are based on payment by results, in proportion to the money that is successfully collected. “It is therefore an opportunity to improve, at no extra cost. There is no additional expenditure, as we just pay a percentage of the money we recover,” explains Eric Estrabols, Subsidiary Ledgers Manager at Bouygues Telecom. A profit recovery audit brings long-term improvement to accounting procedures with a win-win solution, one that is not at all time-consuming for the audited organization as the involvement of in-house teams is kept to a minimum.