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Overpayments are a seriously big problem for P2P teams. They reduce working capital, tying up available cash and making operations and strategy more difficult. In fact, a well-documented statistic says that around 1% of each organisation’s spend is tied up in duplicate payments alone.
The significance of proactivity.
The chances are that in the job description of an average person in AP is the word ‘proactive’. Employers look at proactivity as a sign that you know how to do your job and can do it with hyper-effectiveness. If someone is proactive, then by this reasoning they are also likely to be productive. And we all know productivity is a core aim for any organisation.
Proactivity is the art of creating or controlling a situation, taking initiative to pre-empt what needs to be done. In a daily Accounts Payable position this can mean contacting a vendor at the first sign that a payment will be delayed, rather than after they have chased for it. It could mean prioritising certain invoices to take advantage of early payment discounts. Or it could mean identifying a problem with a process that would lead to issues further down the line and seeking to eliminate it.
Isn’t Accounts Payable inherently a reactive function?
It’s difficult to remove an individual task from the reactive nature of the function. You would never dream of beginning the payment process without an invoice or goods received note to check against. ‘No PO, no pay’ is becoming more prevalent, ensuring that the process does not begin until a PO is issued. All you can do here is react or face the potential issues. In these circumstances, these steps (requesting a PO, goods received note and invoice) are vital to reduce the risk of double payments and overpayments. So, should these actually be viewed as a proactive risk check? We think so.
However, one area that is entirely reactive is in recoveries of historical overpayments. When we look at our work in statement reconciliations, 1 in 9 supplier statements contain a credit error worth an average of £9.6 thousand, so there is a huge opportunity to recover value. However, while recovery audits can be viewed as one more vital step to reduce the spend of an organisation, what they truly are is a strain on time and budget. When outsourced, you lose money by paying for the service but save some time. Internal recoveries save that cash but take more staff time, incurring extra cost. Even then, the full amount may not be recoverable.
Luckily, these costs and time inefficiencies are entirely avoidable with the right tools.
From reactive, to proactive.
Are POs, spot checks and 3-way matches enough to prevent overpayments?
Some people may find the combination relatively successful, but many still find overpayments and need to recover them. According to the PPN Survey 2023, 29% of those surveyed said duplicate payments were a main operational difficulty, and 4% cited fraud or payment errors. For those organisations, we’ll answer the question with an emphatic ‘no’.
The key to proactive overpayment prevention then is instead of spot checks, to monitor transactions continuously for all indicators of duplicate invoices and exceptions. This sounds like a monumental task, and if completed manually, it absolutely is. But another way to be proactive is to implement automation for time-consuming, monotonous tasks.
There is a whole market for software to allow you to do this, including our own FISCAL software, which forensically analyses your data and returns only what we deem as risks. Those risks, alongside exceptions and duplicate invoices, also include fraud indicators. By automating stringent checks on every transaction as soon as they hit your inbox or ERP, your team will be equipped in real time with the tools needed to stop the overpayment before it ever happens. The MineralTree State of AP Report 2024 states that 52% of ‘those who have automated their AP processes’ see increased efficiency and 46% see faster and more timely payments.
Preventing overpayments for good.
But don’t stop there. It isn’t enough to simply find overpayments before the payment run. To be truly proactive in your approach, you need to go further. You need to find the root cause of the duplicate invoice, the extra PO, the typo – whatever was the source of the overpayment. By actively rectifying the risk at source, your will see fewer errors overall and waste less time correcting them.
For this, you’ll need a highly effective set of dashboards and reports to be able to dig deep into your data. You should be able to compare, and cross-reference sets of data to pinpoint some of your most problematic areas. For example, if you compare your highest spend suppliers against the number of duplicate invoices they produce, you’ll find your riskiest suppliers. Dig down into the causes of those duplicates and you may find that invoices from that supplier consistently result in the same error in your ERP, which is causing duplication.
If you compare overpayment rates with the member of staff working on that transaction, and dig down into a particular set of risks, you may find non-compliance to process. When speaking to the team member, you could find there is difficulty with following process that necessitates circumvention. As a result, you may need to alter ways of working to ensure the issue does not happen again.
Conclusion – Reducing overpayments the proactive way.
Despite Accounts Payable seeming like a reactive finance function, team members can be proactive regardless, offering huge value to the organisation.
By introducing small, incremental changes to process, Accounts Payable can make a difference in the long run, allowing teams to proactively reduce duplicate invoices, exceptions, and non-compliance.
In our experience at FISCAL, many customers have seen incredible results when automating their AP risk controls, with most seeing ROI within the first 3 months of use. One such example is University Hospitals Sussex, who prevented over £50,000 in duplicate payments, and achieved over 1000% ROI overall.
How FISCAL helps you avoid overpayments, duplicate invoices and more.
When it comes to stringent financial controls, FISCAL’s AI-native P2P risk management software can help you be more proactive, and remedy invoice and supplier issues before payment to help prevent overpayments. Our platform continuously analyses your ERP data for errors, duplicate invoices, and identifiers of fraud. We share all the risks we find with you in real time, so you can process invoices faster, but with high accuracy.
We would love to help you in your proactive journey to best in class Accounts Payable.
Updated July 2026.
