Are Accounts Payable overpayments reducing your
Each year the average Fortune 500 company
issues an estimated 300,000 checks from its Accounts Payable department, with
overpayments in excess of $5 million per company. Even if your business is not
in the Fortune 500 ranking, overpayments can occur even though strict controls
exist. It is estimated that the average company overpays by 0.1% to 0.2% of
Possible Causes of Overpayments:
- Payments are made from both original invoices
and faxed invoices.
- Acknowledgements are accidentally paid.
- Missing receiving documents are recreated and
signed resulting in duplicate receipts.
- Invoices for operating expenses are approved
and paid twice.
- Charges to credit cards are mistakenly paid
Inexperienced and temporary Accounts Payable
Representatives pay invoices without proper documentation.
Clerical input errors occur.
Vendor credits are not deducted.
Freight bills are not properly
cross-referenced to shipments or receipts.
Cash discount terms are not taken.
Trade discounts are missed.
Disorganization may result in errors.
Sales tax is mistakenly paid.
Payments are made to the wrong vendor.
- Clerical Error
Returned products are not credited.
Prices charged are higher than agreed upon.
Quantities invoiced are greater than
Freight is incorrectly invoiced.
Vendor invoices contain errors.
Freight carriers issue incorrect discounts.
- Vendor Error
System limitations allow errors to be
Inadequate communications between departments
result in overpayments.
Insufficient procedures and internal controls
may result in errors.
Downsizing, system implementation, merger,
acquisitions and rapid growth strain Accounts Payable and internal controls
You might think your company does not need an
Accounts Payable review. Even with a proficient staff and an advanced computer
system, consider the following:
Human errors occur even with the most advanced
There are over forty steps where errors might
Internal and external auditors review only a
small percentage of invoices, possibly missing overpayments.
Your company could be losing $1,000 for every
$1 million of revenue, if one error is made for every thousand vouchers.
A/P Review, Inc. will recover overpayments and
improve your company’s bottom line.
There are no up-front cost. Our fee is based
on a percentage of monies recovered. Your company can only save money.
A/P Review, Inc. can be used to double-check
Only minimal Accounts Payable involvement is