Double payments

A double payment means that the same invoice is processed and paid twice. Virtually all business systems today have controls in place to catch double payments. As a rule, these controls are based on there being only one unique combination of supplier ID and invoice ID. These controls catch some of the situations that would otherwise risk becoming double payments. However, there are several reasons why the same invoice may be paid twice, and these are not always caught by the business system's controls. One reason may be that the payment is late and a reminder is sent, which is also paid. Another reason may be that the supplier has started using factoring, but the payment is made directly to the supplier. As a result, the factoring company sends a reminder, which is then also paid. If you are part of a group, the reason may also be that the invoice has been sent to the wrong company and is then sent to the right company and paid by both companies.

Double billing

Another type of incorrect payment is double invoicing. Unlike double payment, where the same invoice is paid twice, double invoicing means that the supplier has issued two different invoices with the same content. This can, of course, occur if the supplier accidentally sends an invoice for the same service/product twice. It does happen, but the most common example is when you have had comments on the invoice, such as an incorrect reference, and you contact the supplier to ask them to correct this. The supplier then creates a credit note that they internally offset in their systems and then creates a new debit note that is sent to the customer. The customer never receives the credit note but is left with two invoices for the same thing in their system. There is a risk that both of these invoices will be paid.

Invoices – risks and measures

Interpretation/registration

In addition to double payments and double invoicing, there are a number of types of incorrect payments related to the interpretation of invoices. In other words, when invoices are entered into the system, an error occurs. These include overpayments, i.e. the invoice amount is too high because a digit is incorrect or the decimal point is missing, resulting in two extra zeros. Incorrect currency, i.e. a SEK invoice is handled as a EUR invoice, and a credit invoice is interpreted as a debit, resulting in payment instead of credit.

Accounting/approval

As mentioned earlier, business systems have support for detecting double payments, for example. These are not always sufficient, and therefore a heavy responsibility rests on the approval routine established by the company. Often, it is the first level of authorization, i.e., the person ordering the service or goods, who is subject to high demands. If that person fails to notice that the same invoice or content has been received twice, sometimes weeks apart, it is unlikely that any of the subsequent authorizers will detect this. Do not rely on the approval procedure to catch all types of discrepancies. The primary purpose of the approval procedure is to approve the purchase, i.e., to ensure that the invoice relates to a service or goods that have been ordered and received. Other discrepancies must be prevented by other types of controls, which should be automated and more specific.

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