Mary Schaeffer
Mary Schaeffer
Common Duplicate Payment Problems

Five effective strategies to stop them before they become a nightmare for your accounts payable department.

March 5, 2009
by Mary Schaeffer

With most organizations scrambling to find every dollar, it is imperative that procedures be reengineered to eliminate these five common weaknesses that allow duplicate payments to sneak through.

In the past when bills were paid after receiving invoice and then issuing checks, it was easier, but not simpler, to control duplicate payments. With all the new payment and invoice delivery options now available, every CPA company needs to be concerned about:

  • Payments being made twice using two different payment types;
  • Professionals in multiple departments making payments and not using rigid standards to avoid duplicate payments;
  • Unscrupulous employees or vendors taking advantage of increased "opportunities" to hide a duplicate payment and enriching themselves at your organization's expense.

Five Strategies to Curb Duplicate Payments

  1. Credit Card Payments and Invoices

    This issue may be the hardest to fix. Certain vendors claim they cannot suppress the printing of invoices and continue to send them even though they were paid at the point of purchase (POP) with a credit card.

    Assuming it is impossible to limit payment methodology, there are two steps you can take to guard against paying these vendors twice. First, teach your processors to check invoices closely. Many of the vendors who cannot suppress the printing of the invoice will mark it with a note saying it was paid by credit card. True, many of these notes are in very small print so your processors will have to look closely to find the note.

    If this is not sufficient, consider setting up a separate post office box for those vendors who you pay with credit cards. Invoices that arrive at this box can be checked against credit card statements to ensure payment is made only once.
  2. Extinguishing POs and Receivers

    With the widespread introduction of automatic clearing houses (ACH) payments, responsibility for making payments is sometimes outside accounts payable. However, it is imperative that whoever makes the payment takes all the steps normally taken by in accounts payable. This means using the same rigid coding standards and extinguishing both the purchase orders (PO) and receiving documents (the receiver). This does not always happen.

    If these items are left open and a second invoice shows up, the odds of it being paid a second time skyrocket.
  3. T&E Reimbursement and Invoices

    Occasionally an employee will pay for something with a personal credit card (or cash) and request compensation on their T&E expense reimbursement report. There is absolutely nothing wrong with this and, in fact, it's a recommended approach for small-dollar items.

    Sometimes employees also request reimbursements on the expense report and then submit an invoice for payment. Note that this is fraud and not simply an oversight on the part of the employee or the vendor and is very difficult to monitor and catch.
  4. Check Request Forms and Invoices

    Organizations rely on check request forms to various reasons. Problems arise when backup is scanty (or even nonexistent) and is for an invoice. If an invoice is not attached and/or if information is not keyed into the system immediately, a duplicate payment is often created when the original invoice finds its way into accounts payable eventually.

    Research shows that rush checks (often issued with a check-request form) are one of the leading causes of duplicate payments. We realize that check-request forms and rush checks are here to stay. What we recommend is a stringent requirement for backup and that invoice information be keyed every time a check is issued. Otherwise, prepare for an onslaught of duplicates.
  5. Printing Electronic Invoices

    Today, many companies send invoices by e-mail instead of snail mail. Make sure your processors are not printing them before processing and then inadvertently processing the printed invoice as well as the electronic one.

    If you have very rigid standards for entering invoice numbers and coding standards this shouldn't cause you problems. But even the best processors can one slip up.


Clearly as the business community evolves some of the old controls will no longer work. By taking the time to set up the right controls and making sure that all affected parties adhere to the procedural instructions, you should be able to limit the problem.

Rate this article 5 (excellent) to 1 (poor).
Send your responses here

Mary S. Schaeffer is the author of more than a dozen business books including Controller and CFO’s Guide to Accounts Payable. She is currently working on a book about fraud. (2007 John Wiley & Sons). She serves as the editorial director of Accounts Payable Now & Tomorrow, a newsletter for professionals interested in payment issues, writes a free weekly ezine e-AP News, speaks at accounts payable seminars and conferences and directs the organization’s consulting practice.