When a supplier invoice gets paid twice, Xero gives you nothing to spot it by. Both bills sit there, both are marked paid, and both payments match a line in the bank, so nothing looks wrong.
Getting the money back from the supplier is usually quick. The second bill also went into that week’s food cost and your profit, and its GST goes on your BAS as a credit you can’t claim.
We think every venue should look for doubles once a month, not once a year when the accountant asks why purchases jumped.
The same invoice comes in through two doors
One group we look after had dozens of supplier invoices paid twice, and we have been getting that money back from the suppliers. Most of them were one invoice that arrived twice and went through the payment run both times.
Where the second copy comes from:
- The supplier emails the invoice to you and also to a receipt app, so two copies land in Xero.
- An ordering app sends its own copy of the order with a different invoice number, the same total, a day apart.
- Someone keys in a bill by hand that was already sitting in Xero from the email.
Some receipt apps push bills into Xero already approved, so the second copy goes straight into the payment run without anyone looking at it.
What one double does to a $20,000 week
A $1,100 meat invoice (including GST) entered twice, at a venue doing $20,000 a week in sales before GST:
- Cash: $1,100 out of the bank that you did not owe
- Cost of sales: $1,000 extra on that week’s P&L
- Margin: cost of sales reads 5 points high for the week ($1,000 on $20,000 of sales)
- GST: a $100 credit claimed that you were never entitled to
A 5 point jump on your weekly P&L sends you looking for a price rise or waste that never happened, while the real cause sits in the payables list. If you count your food cost every week, a double shows up as a week that makes no sense.
The GST credit has to come off a later BAS
If the double was coded with GST and that BAS has been lodged, you claimed the credit twice. The ATO lists claiming GST credits for a purchase twice as a debit error, which means you paid the ATO too little.
If your GST turnover is under $20 million, you can fix it on a later BAS when:
- That BAS is lodged within 18 months of the due date of the BAS with the error in it
- Your debit errors on that BAS, less any credit errors, add up to less than $12,500
- The error was not reckless or deliberate
Past 18 months, you revise the earlier BAS instead. Over $12,500, you can fix up to $12,500 on the later BAS and revise the earlier one for the rest. Fixing it on a later BAS is generally easier, and revising an earlier one can bring penalties or interest. On our $100 example you are well inside the value limit, as long as you catch it within 18 months. Dozens of doubles across a few quarters can get close to $12,500. That is another reason to look monthly.
Keep both bills, the supplier’s statement and the credit note together. You have to keep most business records for 5 years.
Getting it back without a long phone call
You can do most of the recovery before you pick up the phone. This is the order we work in:
- Check that both payments left the bank. A copy marked paid with no bank line is only a duplicate bill, so void it. If you report GST on an accruals basis and that BAS is already lodged, its GST credit was still claimed, so it gets the same BAS fix.
- Check the second payment does not belong to a later invoice for the same amount.
- Read the supplier’s statement. If it shows you in credit, or a payment they could not match, the supplier already agrees with you. We put a credit for that amount in Xero and it comes off the next bill.
- If the statement does not show it, call and agree the amount before you take anything off.
- Either way, ring every supplier that sent a double so it doesn’t happen again. Usually that means one email address for invoices and switching off the second copy.
Most suppliers are fine about it. The money was never theirs, and their own statement usually says so.
What we would do
- Once a month, sort paid bills by invoice number and look for the same number twice, then the same amount from the same supplier within a few days.
- Read every supplier statement for payments they could not match or a balance in your favour.
- Give each supplier one email address for invoices.
- Take the GST off the next BAS while you are inside the time and value limits.
If we are your hospitality bookkeepers, we capture and code your invoices as they arrive and pay your suppliers once a week. That is in every package.