Scary thought: Financial loss from “improper payments” has affected almost half of your peers.
That’s according to the latest research by The Aberdeen Group.
Here are the three greatest sources of improper payments, as well as how to keep your firm from falling victim to them.
- Billing/invoice errors. Here’s where the bulk (70%) of improper payments arise. While simple keying mistakes are very common, no company wants to pay hand over fist for these errors.
To limit your risk: Automate whenever possible. This includes everything from electronic invoicing to automating recurring payments and everything in between.
- Supplier/vendor errors. From a sales rep writing down the wrong amount to an AR rep being unaware of a certain discount, there is no shortage of communication errors that can occur with a supplier.
To limit your risk: Even though it requires some extra legwork, it may be worth it have purchasers look over invoices — line item by line item — to make sure you’re getting exactly what was agreed upon.
- Duplicate bills. Forty-four percent of the companies that made an improper payment say they paid the bill twice.
To limit your risk: Make sure your master vendor file is spotless — each vendor is only entered once, the system is periodically purged, etc. It may also be worthwhile to institute a standardized way for staffers to enter vendors into the master file.