Purchase Orders are one of the best controls for preventing duplicate payments. The key control feature of purchase orders is that they link payments to specific vendors. When purchase orders are incomplete, they do not provide the necessary information to the AP clerk responsible for reconciling the transaction.
During a recent discovery review, TAG discovered nine duplicate payments, totaling $88,570, that occurred because the invoices were not tied to a PO. Two duplicate payments made to Locums Tenens were not prevented by the ERP system because the PO was not linked to the invoice to provide the necessary control. An October payment was duplicated in December because invoice number had space and the other did not when entered into the ERP system.
Another duplicate payment was made to Koffell Associates when a zero was removed from the invoice number incorrectly. The $16,500 invoice was not tied to a Purchase Order either time it was entered.
The tips below will help organizations prevent duplicate payments from occurring by using Purchase Orders correctly.
Continue reading for more TAG Tips on Purchase Orders.