The purchasing manager at a mid-sized cabinet manufacturer found it by accident. She was reviewing a year of invoices from the firm’s biggest hardwood supplier and noticed that two invoices, from three months apart, had exactly the same invoice number — but different amounts. That single discovery led to a full audit that found $186,000 in duplicate payments, wrong prices, and early-payment discounts never taken. On a company making $2 million a year, that was 9 percent of profit, paid away to nobody’s benefit.
How a supplier can overcharge you without breaking any obvious rule
When ERP Consulting pulled the full payment history, the overcharges broke down into four repeating patterns. Hardly any of them were fraud. Most were simply errors and mismatched information that the old system had no way to catch.
- Two invoices carrying the same number were each paid in full because the payment approval process only checked the dollar amount, not the invoice number against history.
- The supplier sent revised pricing in September, but the system still paid the July rates because the price list was updated in a separate spreadsheet that nobody synced.
- Invoices with small but real math errors — a tax miscalculation, a rounding mistake, a shipping line added twice — flowed through because nobody re-calculated the total by hand.
- The company paid every invoice on the 30th day, even the ones that carried a 2 percent discount for paying within ten days. The discounts it missed across a year added up to over $27,000.
The fix: three rules that caught errors in the first week
The ERP Consulting engagement set up a simple approval flow that every invoice must pass through before payment. The system checks the invoice number against every invoice already paid — any repeat gets flagged immediately. It compares the unit price on the invoice to the agreed price loaded in the system, and it holds any invoice that differs by more than half a percent. It also calculates the early-payment discount and pays every qualifying invoice on day nine instead of day thirty.
The results came fast. In the first week alone, the system flagged three duplicate invoices worth $14,000. In the first quarter, recovered overcharges and captured discounts totaled more than the cost of the entire ERP Consulting project. But the bigger win was quieter: the purchasing manager stopped spending three hours a week checking invoices by hand, because the check now ran automatically.
The check you can run this week, no software needed
Sort your last twelve months of supplier invoices by invoice number and look for any number that appears twice. Then pick your five biggest suppliers, find the “agreed price” on your purchase orders, and compare it to what you paid on the last ten invoices. You will almost certainly find at least one overcharge — that’s the norm, not the exception.
The cost of late payments and missed discounts is easier to see: add up every early-payment discount on your pending invoices and calculate what 2 percent of them is worth. If that number surprises you, you have your business case. ERP Consulting can show you exactly where the payment controls should go, but the first sort by invoice number is a ten-minute job you can do today.