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There is always a chance that the accounting system would pay the same invoice twice.
Most companies have developed internal strategies, safeguards, securities,
authorizations and quality checks to monitor their accounting systems and reduce the
number of overpayments.
However, there still remains a significant number of Duplicate Invoice Payments
(DIPs) made to companies each year. Two methods for detecting potential DIPs are
provided in this article by using Microsoft Excel and Visual Basic. In 2002, Joseph T
Wells estimated that there was $600 bn in the business which was fraud. DIPs are the
basis for a constellation of internal fraud schemes and most of us would consider such
accounting entries as errors to be corrected and dismissed. While DIPs may appear to
be a system’s failure, there are many alternative routes for entering duplicate invoices.
Most accounting systems exclude DIPs. Consequently, to enter an invoice the system
must be circumvented. For example, add an alpha character to the invoice number i.e.,
12345A.
One way to test if there are overpayments is to ask the creditor for a copy of the
account statement or if there is a credit balance on their receivable account. A second
method is to develop an internal test to extract any duplicate invoices.
There is a time limitation associated with viewing a list of invoice payments because
there may be thousands of invoices paid in a single accounting period and many more
if there is more than one period under consideration.
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