Duplicate payments: why every organisation makes them and how to recover them

Ask any finance director whether their organisation makes duplicate payments and the answer is almost always no. Ask a recovery auditor and the answer is: we find them at almost every organisation we review. The difference is not carelessness but statistics. Anyone processing tens of thousands of invoices a year inevitably makes mistakes, and some of those are duplicate payments.

How does a duplicate payment happen?

Most duplicate payments do not happen because someone clicks 'pay' twice. They happen because the ERP system's control mechanism is bypassed without anyone noticing. The most common causes from our audits:

• The same invoice arrives through two channels, for example by email and via a supplier portal, and is registered twice.
• The supplier appears twice in the vendor master file, under two vendor numbers. The duplicate check on invoice number works per vendor and therefore does not trigger.
• The invoice number is entered slightly differently (F2026-001 versus F2026001), so the system treats it as a new invoice.
• An urgent payment is made manually and the same invoice is later paid again in the regular payment run.
• During a system migration, open items are transferred twice or presented again.

Why you do not see it on your own

A duplicate payment is invisible in the accounts: there is an invoice against it, the ledger balances and the period is closed. Suppliers by no means always report a double receipt, especially when the amount sits in their books as a prepayment or unidentified balance. Without active detection, the money does not come back.

How to detect duplicate payments

Detection relies on fuzzy matching across the payment history: not just looking for identical invoice numbers, but for combinations that are almost the same. Think of the same amount and date under different vendor numbers, the same invoice number with a different punctuation mark, or the same amount from the same supplier within a short period. Doing this manually is impossible; with algorithms that test several attributes at once, it takes days.

Recovery: how does it work?

Legally, a duplicate payment is an undue payment and can in principle be reclaimed up to five years back. In practice recovery almost always goes smoothly: the claim is supported with the payment details, the supplier verifies it in its own records and repays or offsets the amount. What matters is that the claim is complete and correctly substantiated, otherwise it stalls. In a no cure, no pay recovery audit, the auditor handles the entire process, from detection to receipt of the money.