Q: Regarding duplicate billing of services, we have employees who travel frequently and we get a "decent" rate with the limousine service we use. About a year ago we discovered that the limousine company had begun to re-use their invoice numbers (our accounting system detects duplicate invoice numbers at the vendor level and kicks them out). We contacted the company and they claimed that they were unaware the numbers were being duplicated and that there was nothing they could do about it; but we felt that our system would catch the duplicate invoice numbers.
Now we have another problem with the vendor. They billed our company and our employee for the same service. The employee had paid for the service by credit card and yet our company was still billed. We asked the vendor for a credit memo for the adjustment and were advised that they could not produce one from their system. They advised us to short pay the invoice, which we did.
The vendor removed the item in question from the invoice, put all of the other charges from that same invoice onto another invoice, changed the invoice number and sent the invoice to us. Guess what? Yes, we paid for the same services twice because they were double billed with DIFFERENT INVOICE NUMBERS. That's not all. We did not discover this until the vendor sent us a "note" indicating that the duplicate billing of the same services had occured and that they have applied the credit to a 7-month-old invoice for services that we had not paid.
We do not receive statements from this vendor, so we had no knowledge of the past due invoice. We will ask this vendor for a monthly statement going forward. Clearly we can no longer trust the integrity of this vendor's billing practices. What suggestions do you have for ensuring that we do not duplicate pay for serivces that have been billed on a different invoice?
A: In this situation it's certainly possible that there may be duplicates, if the vendor continues to change invoice numbers and if your accounting system's edit check is looking for the invoice reference as a duplicate edit. Here are a few thoughts:
- If your system allows for other options regarding edit checks, including non-financial item checks, then you may consider having the limo company document the date of service and the passenger. You could then match this to your travel itinerary for verification. Assuming the accounting system accepts non-financial information on the invoice, entering in this date of service and comparing it to the itinerary can help isolate duplicates.
- You could do a full audit of each invoice until you are satisfied that the billing has been straightened out. Once you get comfortable, then you could go to a spot check on a periodic basis. A full audit of every invoice can be time consuming depending on the number of invoices.
- If the vendor continues using different invoice numbers and your system does not have the ability to match & verify non-financial data, then you could set up your own invoice reference naming convention for these invoices. You would want to set it up so that even if the vendor submits an invoice for the same charges twice but on two different invoices, your accounting systems edit check on your own invoice reference number that you created, which could catch the duplicate.
For instance, if the name of the traveler is Bill Smith and their travel date was 1/31/2007, then you may consider using BS01312007 as the invoice reference number so when you get the same charge again on a different invoice you would still use the person’s initials "BS" and the date of their travel as the invoice reference number.
On the other hand, maybe it's time for a new limousine service!