Accounts Payable software systems are packed full of control features to prevent duplicate payments on a single invoice. However, this AP software only works as intended when your Accounts Payable department enters invoices into the system correctly and consistently.
Human error happens, but these mistakes can cost major health systems quite a bit. Sometimes AP personnel or data entry staff might enter the incorrect invoice number, company number, or vendor number into the AP system. In these instances, the AP software is unable to detect if a duplicate payment happens because the data is inconsistent or incorrect.
During a recent review of a health system’s procure to pay process, The Audit Group identified 167 duplicate transactions in the health systems Accounts Payable software. These transactions totaled to $435,000. Of the identified transactions, the internal review team could manually correct 83% of the potential duplicate payments in dollars.
However, the health system’s AP software, Lawson, was unable to identify nearly $80,000 in additional duplicate payments. The root causes of error included:
After our review, TAG worked with the health system to implement training programs for Accounts Payable and data entry staff to prevent future errors.
To ensure that costly data entry errors don’t occur, follow our tips below when entering invoices and processing transactions through AP systems:
Identify the limitations of your AP software, and educate your staff on the findings.
Train your AP and data entry staff on AP systems, and emphasize the importance of accuracy and consistency.
Hold front-line staff and their departments accountable for entering vendor and invoice data consistent with department guidelines.
Is your health care system or hospital losing money because of data entry errors? TAG can work with your Accounts Payable staff to determine the correct process for entering invoices and processing transactions through your chosen AP system. Contact our healthcare cash flow and process improvement experts to get started.