Duplicate postings duplicate problems
It is not difficult to end up with multiple copies of the same transactions and therefore process duplicates. With the number of emails we receive copied into multiple people within an organisation it becomes difficult to manage very quickly. When you then throw on top the receipts and debit/credit card slips captured by expense management and data capture tools it quickly becomes overwhelming.
Whilst Hindsight can detect these duplicates once posted in your accounting ledgers there is ultimately no substitute for looking at internal processes to avoid the situation occurring in the first instance. Prevention is better than cure after all.
What does Hindsight check
Every day Hindsight will check your clients accounts receivable and accounts payable looking for potential duplicates. We are scouring invoices, bills and credit notes.
Hindsight determines a duplicate posting in the following situation:
Contact name is an exact match
Transaction amount is an exact match
Transaction date is within 3 days (this allows for the situation where there may be a simple data entry mistake or items processed via receipt and card slip are both presented)
Transaction reference uses fuzzy logic to determine if there is a match.
If Hindsight finds duplicates based on the above parameters but we can see the potential duplicate has been fully credited then we will omit that from the results returned. If a duplicate has been fully credited it would imply that someone has already seen the issue and rectified it. You do not need us to bring it to your attention again and create work for you.
How do I correct a duplicate posting
To correct a duplicate posting there are a few options available:
- Review the potential duplicates by clicking in the Xero hotlink and investigate the transaction. If you are happy that there is no duplicate then you can click Dismiss from the Complete action button. This will notify Hindsight not to present this again.
- Review the potential duplicate and if you are certain a duplicate has been detected then you will need to remove the offending item from Xero.
- If the transaction is recent and does not have any payments allocated against it you could void the transaction in Xero. Hit the Complete button in Hindsight.
- If the transaction is in a closed period perhaps in a prior period that is closed for reporting purposes you may wish to credit the transaction and then allocate the credit to the transaction. Hit the Complete button in Hindsight.
- If the duplicate postings have both been paid then you will need to raise a credit note and seek a refund from the contact as they owe that money to you. You could also allocate the credit to a future transaction which will have the same outcome. Hit the Dismiss button in Hindsight as the system will continue to pick this up as a duplicate as there continues to be two transactions in the system.
If the client is responsible for their own bookkeeping then you can export the duplicate postings and email to them for them to check. Choose from Copy, Excel or PDF options by selecting relevant option from the button group shown above.
If you are working with lots of duplicates you can also use the search option to find a transaction. You can enter multiple search criteria in the search box by leaving a space between each criteria.
If you are not going to take corrective action in Xero you will need to mark the alert as Dismiss to tell Hindsight not to keep flagging up the duplicate. On further investigation the Siteground bills were two different domain name renewals so not a duplicate and was ‘dismissed’. The Virgin Media bill was a duplicate but the money is collected by Direct Debit so fortunately no overpayment made. The outstanding bill was voided in Xero and the alert ‘completed’ in Hindsight.
Problems duplicate postings present
Whilst duplicating a transaction in your accounting system is an easy and common thing to do it can cause multiple issues. Below we have used a real example where £24,500 of duplicate postings were identified for one business. This was a small business owner and £24,500 represented a big problem.
- Overpayment to suppliers – out of the duplicate postings identified the client had double paid £2,225 of them. Not terrible but you would rather they had that money in their bank account.
- Overclaiming VAT – the client was VAT registered so had claimed VAT of £4,083 that should not have been claimed. This will need to be corrected. Let’s hope it doesn’t cause a cashflow issue.
- Understating profit – the extra net costs of £20,417 were all profit and loss items so the profit for this client was understated to that effect. This had an impact on the margins being reported and decision were being made in his business based on incorrect financial information. This can lead to people losing their jobs. What we do as accountants and bookkeepers has the ability to make that much impact.
- Understating Corporation Tax due – as profits are understated by £20,417 the amount of corporation tax due would be understated by £3,879. Again this would need to be rectified and could cause a cashflow problem.
- Credit rating – the affect of the poor margins, and poor profit have an impact on the way a credit rating agency views a business. The effects of the above could ultimately lead to making it harder to get funding for the business through a loan.
- Personal income – the overall reduction in profits of £16,538 (£20,417 – £3,879) means the Director was unable to pay that amount to themselves in dividends. What if they needed to report that extra income to get a mortgage. As we can see what seems like a pretty acceptable common mistake can have far reaching implications.
For this business we did not identify any duplicate sales invoices but we have added some examples to highlight the potential issues.
- Overcharging customers – no one likes receiving unexpected invoices especially if they are due to poor administration. This can cause long term relationship issues with customers if you cannot get this most basic of things right. If they are paid then you will end up with a cashflow problem when the money needs to be paid back.
- Overpaying VAT – if you are the VAT accrual scheme you could end up paying VAT over before you ever receive it causing a cashflow problem in the business.
- Overstating profit – profits would be overstated resulting in bonuses being paid, poor decision making based on incorrect financial information and potentially dividends being paid to shareholders incorrectly. We’ve experienced this many times and it can ultimately result in a breakdown of relationships and the business.
- Overstating Corporation Tax due – overstating profits will ultimately lead to paying too much corporation tax. Again if the sales invoices are never paid in the first place that is a potential cashflow problem for the business.
Hindsight cannot avoid these things happening but what it can do is notify you when it has happened so you have the ability to react and correct the situation before it becomes a big problem – death by a thousand cuts.