Purchase Card (P-Card) Transactions and Duplicate Payments

Purchase Card (P-Card) Transactions and Duplicate Payments

By: Jim Paolucci, Strategic Audit Solutions

There are a growing number of companies that are adopting the use of Purchase Cards (P-Cards) as an option to pay their supply chain vendors for smaller dollar transactions. This method of payment can provide efficiency savings exceeding 50% from the traditional Accounts Payable process.

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 capabilities:

  • 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.

Let SAS help you recapture P-Card duplicate payments.  

About the Author:

Jim has spent over 30 years in the Recovery Auditing industry in various leadership roles with experience in finance, accounting, operations, client relations, and business unit management.  Prior to joining SAS, Jim server in various leadership roles for other Recovery Audit companies.  Jim has partnering with the key decision makers for Fortune 500 and multibillion dollar companies including retail in establishing and executing professional services in the areas of recovery auditing, consulting, advisory, risk mitigation, operational improvements and business process outsourcing.