Cashback: How the audit department pays off with duplicate payments

Posted by Prof. Dr. Nick Gehrke on Mar 15, 2017 4:45:00 PM

It is not always easy for the auditor to point out and communicate the value contribution of the audit department to the company. The audit department is often regarded as a regulatory necessity. Of course, it is much easier if the insights of an audit save money. That is why I dedicate this four-part series to the very appropriate and worthwhile topic "duplicate payments" and how to get them on track. Already the Latins knew: Pecunia non olet ("Money has no smell").


Part I of the series: "Discovering Duplicate Payments"
1. Cashback: How the audit department pays off with duplicate payments
2. 3 steps for detecting duplicate payments in SAP
3. Duplicate Payments: Reducing False Positives using a Utility Analysis
4. How to prevent Duplicate Payments with the Internal Control System



Duplicate Payments - not in my company !?

There are no duplicate payments in every good organized company you may think: SAP itself takes care of duplicate payments. Not even close! The reasons why such duplicate payments happen are manifold. I myself was, for example, once in a company in which various ERP systems were consolidated. Frequently, the master data consolidation is "forgotten" during data migration on project day, leading to master data doublets at the vendors. The clerks lose the overview, while the suppliers are already pressing because of late payments. Master data doublets are used at the same time and the balances of the vendors are no longer to be determined without doubt. In such a scenario, the first duplicate payment is not far!
Duplicate payments are always an important issue for auditing, as direct asset losses can be reported and reimbursements are a liquidity aspect for the company. The auditors can generate a direct value contribution to the company. In addition to the lost money, systematic weaknesses in the internal control system can also be discovered if, subsequently, an invoice is duplicated. The objectives of a duplicate payment analysis are:

  • Discover Duplicate invoices
  • Recovery of Duplicate payments
  • Identification of weaknesses in the internal control system for payments


How do duplicate payments arise?

There are various reasons for duplicate payments. Here are some reasons from my experience, which led to duplicate payments:

  • Accounts payable are recorded twice because they are circulating several times in the company.
  • An invoice is recorded twice, once through the automatic process of invoice receipt by scanning the invoice and once as a paper invoice.
  • There are master data duplicates for the vendors, and an invoice is often posted to different vendors, but they are duplicates.
  • A partial payment has been posted and the invoice will be paid in full later.
  • There is no proper approval process for the release of an invoice for payment.

    In the following articles I will explain how to analyze duplicate payments in the SAP system. Anyone who can analyze his data in a clever way will find cash: Cashback!


Topics: Data Analytics, purchase to payables, SAP Audit, duplicate payments

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