How to Detect Duplicate Invoices with IDP? 

Whether it’s for expense management or payment reconciliation, invoices are an inevitable part of a business’s day-to-day operations. However, they can also be a source of vulnerability for your organization. 

In fact, according to the Washington State Auditor’s Office, organizations make duplicate payments ranging from 0.8-2% of their total payments due to duplicate receipts and invoices. While this percentage may seem small, the impact of duplicate invoices can be significant, resulting in substantial financial losses and operational inefficiencies on every level.

To help you confront this growing issue, we’ll explore what duplicate invoices are, their potential impact, and how to effectively detect duplicate invoices. Read on! 

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Key Takeaways

• Duplicate invoices are copies of the same invoice submitted for a single transaction.
• They can occur for various reasons, including human error or intentional financial fraud.
• The consequences of duplicate invoices can be serious for businesses, leading to financial losses, cash flow issues, and accounting discrepancies.

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What are Duplicate Invoices?

Duplicate invoices refer to multiple copies of the same invoice being issued for the same transaction. Whether a result of human error or deliberate fraud, if left undetected, duplicates cause administrative bottlenecks and lead to unforeseen expenses.

What Are the Causes of Duplicate Invoices?

Duplicate invoices and duplicate payments can occur due to a wide range of reasons. Here are some of the most common causes:

• Human Error: This can occur at various stages of the invoicing process, from the data entry step to the invoice reconciliation process or even the approval. Humans make mistakes, which can lead to double invoicing or undetected duplicate submissions. 
• Financial Fraud: Duplicate invoices could also be a result of intentionally fraudulent efforts on the part of your employees or suppliers intending to commit expense fraud or invoice fraud.
• Lack of Oversight: Inadequate controls or oversight in the invoicing process can also contribute to duplicate invoices. Without proper checks and balances in place, duplicate invoices may go unnoticed until they are processed for payment.
• Lack of Centralization: A lack of a central destination where all incoming invoices can be submitted can lead to duplicate invoices being sent via different methods and getting lost in the system until it’s too late.

No matter the cause of duplicate invoices, their existence should be of concern to you. In the next section, let’s go into detail about the impact duplicates can have on your business. 

The Impact of Duplicate Invoices

Undetected, duplicate invoices can have far-reaching consequences on all facets of your business. Here are some of the issues that often arise:

• Financial Loss: Duplicate invoices lead to overpayment, resulting in financial losses for your business, which would negatively impact your bottom line and overall profitability.
• Cash Flow Problems: Duplicate invoices can disrupt cash flow management, as the funds tied up in payments for duplicate invoices may affect the company’s ability to meet its financial obligations, causing liquidity issues. 
• Compliance and Auditing Issues: Duplicate invoices often raise compliance concerns and result in failed audits. If auditors flag inconsistencies in financial records, it can lead to further scrutiny and potential fines or penalties.
• Deterioration of Vendor Relationships: Duplicate invoices that result in delayed payments or even incorrect payments can lead to frustration for suppliers and strain long-term partnerships.
• Accounting Errors: Duplicate invoices can cause discrepancies in financial records and accounting systems. This can lead to inaccuracies in financial reports, making it challenging for businesses to track their expenses and revenue accurately.

When it comes to duplicate invoices, the stakes involved are just too high. Since human errors are one of the primary causes of duplicate invoices, relying on manual detection is far from a secure choice. A more foolproof approach would be to automate invoice duplicate detection. Let’s find out how our solutions can help you with this.  

How to Detect Duplicate Invoices with Klippa

At Klippa, we offer two possible ways of detecting duplicates: SpendControl, a spend management system, and DocHorizon, an Intelligent Document Processing (IDP) platform that provides various document processing solutions.

SpendControl

Klippa SpendControl is our digital solution for processing, approving, and archiving expense claims and invoices. 

When an invoice is uploaded to the SpendControl platform, the software processes the invoices and sends a warning when three of the following fields match those of a previously uploaded invoice:

• Invoice number
• Merchant name
• Purchase date
• Amount

It is as simple as that with Klippa SpendControl. The alternative solution, Klippa DocHorizon, requires a few more steps but is just as simple. 

DocHorizon

Here is how invoice duplicate detection works with DocHorizon. 

Step 1: Sign up on the platform

The first thing you have to do is to sign up for free on the DocHorizon Platform. Enter your email address and password, then provide details such as your full name, company name, use case, and document volume. Once you’ve done that, you’ll receive a free credit of €25 to explore all the platform’s features and capabilities.

After logging in, create an organization and set up a project to access our services. To detect duplicate invoices, simply enable the Financial Model and Flow Builder to get started. This setup ensures you have everything you need right from the start!

Step 2: Create a preset

Once activated, you can create a new preset. Let’s name it “Detect Duplicate Invoices”. Then you can activate the components you need for your specific use case. For this case, you’ll enable the financial, line items, and hash component. A hash is a unique identifier for a document, made of key data points, more details in the video below.

Here’s a tip: You can add an additional hash field; for instance, if the company name always differs, you might choose that field to include. Then, if a company name appears twice, the invoice will be flagged.

Click “Save” to finalize your settings and you’ll be ready for the next step in the Flow Builder.

Step 3: Select your input source

After creating your preset and enabling the Flow Builder, it’s time to build your flow. A flow is essentially a sequence of steps that define how your invoices are processed and transferred to your output destination. For this example, we will choose Google Drive as our input source.

Go to the Flow Builder in the Services area, click New Flow → + From scratch, and assign your flow a name. We’ll name the flow “Detect Duplicate Invoices”.

Here’s a tip: The first step in building your flow is selecting your input source. You have several options: you can upload files directly from your device or connect to over 100 external sources, including Dropbox, Outlook, Salesforce, Zapier, OneDrive, your company’s database, or cloud storage solutions like Amazon S3 and iCloud. Make sure to place all invoices in the same folder so they can be processed in bulk if needed.

For this example, we’ll choose Google Drive as our input source, create a folder named “Input“, and upload a PDF invoice into our newly created folder. Rest assured, our platform can also process invoices in other formats, like DOCX, JPG, PNG, and many more.

Let’s continue with the step-by-step process. Choose your input source by selecting “Google Drive” and then “New File” as your trigger. This is going to start your flow. On the right side, fill out the following sections:

• Connection: You can assign any name to your connection. For instance, we’ve named ours “google-drive”. Once named, the system will prompt you to authenticate with Google.
• Parent Folder: Input
• Include File Content: Check this box to ensure file content is processed.

Test this step by clicking on Load Sample Data: remember to have at least one sample invoice in your input folder while setting up your flow.

Here’s a tip: Since the platform supports a wide range of document types to meet all business needs, you can check our comprehensive documentation to learn more.

Step 4: Capture and extract data

Now, it’s time to extract the necessary data by using the previously created preset to process all the selected data fields from the invoices in the input folder.

In the Flow Builder, press the + button and choose Document Capture: Financial Document.

To proceed, configure the following:

• Connection: Default DocHorizon Platform
• Preset: The name of your preset (in our case “detect_duplicate_invoices”)
• File or URL: New file → Content

Then, test the step to ensure everything is working correctly.

Step 5: Split your flow

The next step is to configure the router. The router lets you split the flow into branches based on specific conditions. In this case, we’ll create two paths: one for invoices with duplicates and one for invoices without duplicates.

• Branch 1 will handle the invoices with duplicates. To set this up, go to the right panel and select the following condition:
  Execute if: Document capture → Financial Document → Components → Hash → Is Duplicate.
• Branch 2 doesn’t require any conditions. Since Branch 1 already filters out the duplicate invoices, Branch 2 will automatically process the invoices without duplicates.

Step 6: Select the action if duplicates

The next step is to define what happens if a duplicate is found. In this example, we’ll choose to send an email via Gmail, but you can select any action that suits your workflow, such as sending a message to your communication platform like Slack or Mattermost, for instance.

To configure this, select Gmail: Send email. First, connect your Gmail account by clicking the button at the top right. Then, complete the following fields:

• Receiver to Email: Enter the email address of the person who should be notified of a duplicate.
• Subject: Define the subject line of the email. In this case, we’ll set it as
  duplicate + Document capture → Financial Document → Components → Financial → invoice_number.
• Body Type: Choose Plain Text.
• Body: Write the message you want to send. For example:
  Hi,
  “Document capture → Financial Document → Components → Financial → invoice_number” was received and has a duplicate. Please take a look.

Once you’ve tested this step, you’re almost done. The final step is to save your configuration.

Step 7: Save the file

The final step is to choose the destination and the data format for the final output. The destination can be your database, ERP system, accounting software, or any other platform depending on your workflow. The data output format can be chosen from JSON, XML, CSV, XLSX, UBL, PDF, or TXT.

For this example, we’ll set the invoice number as the file name with the extracted data and save it in JSON format. We’ll create a new folder in Google Drive, name the output folder “Output“, and set it as a final destination for our file with the extracted data. 

Press the + button and select Create new file → Google Drive

To proceed, configure the following:

• Connection: google-drive
• File Name: Document Capture: Financial Document → components → financial → invoice_number. Next to it, type .json
• Text: Document Capture: Financial Document → components
  • Here’s a tip: Select the text you want to include in the new document. By selecting “components” you choose all the extracted elements.
• Content Type: Text
• Parent Folder: Output (the name of your output folder)

Test this step by clicking the button at the bottom right. And just like that, you’re all set!
To verify that the flow correctly detects duplicates, simply upload the same invoice twice.

Congratulations! All the invoice data is now available in your Google Drive folder. With this setup in place, you can publish the flow, and any new invoices added to the folder will be processed automatically, and duplicates will be flagged. That’s how you can save time while ensuring accuracy in your workflows.

And remember: if you’re processing a high volume of documents, you don’t have to set up the flow yourself. We’d love to hear about your use case and help you get started!

Streamline Your Invoice-Centric Workflows with Klippa 

Klippa’s solutions provide your business with a range of benefits to improve your invoice workflows in the long term. With our solutions, you can:

• Save time: Save up to 70% in processing time and reduce manual tasks like data entry to optimize invoice-related workflows like invoice reconciliation, spend management, or expense management.
• Prevent fraud: Leverage our intelligent document fraud detection, to protect your organization from the efforts of fraudulent actors. 
• Customize your workflow: Create custom document processing workflows to suit your invoice processing needs and much more. 
• Enhance accuracy: With AI-powered Optical Character Recognition (OCR) technology integrated into our solutions, you get to achieve up to 99% data extraction accuracy and automate data entry. 
• Integrate with ease: Easily integrate Klippa’s solutions with the accounting and enterprise resource planning (ERP) systems of your choice. We have 50+ integration possibilities.

Ready to find out how Klippa’s invoice duplicate detection solution can be integrated into your business flow? Book a demo below or contact one of our experts for more information!

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