REAP THE BENEFITS OF P-CARD USAGE, BUT MITIGATE THE RISKS.
Some tangible and intangible benefits which accompany a P-Card payment process for the end-user include:
- Simplified payment process
- Electronic payments
- Faster payment delivery
- Mailing and payment handling cost reductions
- Strengthening supplier relationships due to timely payments
- One monthly payment to the card issuer instead of numerous payments to many different suppliers
- P-Card monetary rewards in the form of rebates which can turn a company’s Accounts Payable cost center into a revenue generator
ASSOCIATED P-CARD TRANSACTION DUPLICATE PAYMENT RISKS
While P-Card payments do have many benefits, this form of payment processing certainly does not eliminate the need and use for traditional Accounts Payable payment practices. In fact, the implementation of a P-Card payments to the payables process can introduce the additional risk of duplicating a payment to a supplier.
If a company pays for a product or service by both P-Card and the traditional Accounts Payable process, the duplicate payment can be missed for various reasons:
- Payments may have different vendor names
- Vendor numbers will not match
- Transaction dates may be different
- Transaction amounts can be different (i.e.: the P-Card payment could cover multiple invoices)
Even the strongest internal control procedures will not totally eliminate the potential for double paying a supplier.
HOW DOES YOUR COMPANY RECAPTURE THESE DUPLICATE PAYMENTS?
If your company benefits from the utilization of P-Card supplier payments, it is important that you review for duplicate payments. When choosing a recovery audit firm, you should ensure that the firm has the following skills:
- Ability to acquire the proper and full set of data from your company’s P-Card transaction institution
- Ability to process, mine, and validate the P-Card data with your traditional payables data
- Ability to merge the AP data and P-Card transaction data sets, eliminate the noise, and identify true duplicate payments between AP and P-Card
- Provide recommendations to eliminate future profit leakage