The invoice came in by email on a Tuesday. It was sent by the packaging supplier, a man named Hidalgo, as a PDF with his blue letterhead. Carmen received it, in admin. Carmen printed it, stapled it to the delivery note already on her desk, filed it in the "pending payment" folder and on the following Wednesday she paid it by transfer. One thousand eight hundred and twelve euros, VAT included.
The next Thursday, Hidalgo called. His voice was friendly.
—Carmen, the payment for this month's invoice hasn't come in.
—Which one?
—The one from the 14th.
Carmen opened the bank. She gave him the date and the reference. Hidalgo went quiet for two seconds.
—No, dear. That's last month's.
—How can it be last month's, if I paid you last week?
—I'm telling you, it's last month's.
Carmen hung up. She went down to the warehouse. She spoke to Mario, in logistics. Mario was the one who received delivery notes. He signed them, wrote them down in a notebook and brought them up to admin when he remembered. Sometimes he brought them up the next day. Sometimes on Friday. Sometimes he left them in Carmen's tray without saying anything.
Mario, this time, had done something different. He had scanned the delivery note and emailed it to Carmen. A Friday at seven in the evening, before he left. In the body of the email he wrote "packaging invoice". He didn't put a date, or a number, or anything. Just the scan.
Carmen received the email on Monday. She saw the scan. It looked like an invoice. She paid it.
The same invoice, in fact, that Hidalgo had sent as a PDF two weeks earlier.
One thousand eight hundred and twelve euros. Again.
The two entry doors
In the company there were two doors for invoices. Door one was Carmen's email. Suppliers sent their PDFs there. Door two was the warehouse. Delivery notes arrived on paper, Mario received them, brought them up. Sometimes he scanned them.
The two doors didn't talk to each other.
Carmen had an Excel sheet where she wrote down what she paid. Mario had a notebook where he wrote down what he received. But the Excel and the notebook never crossed paths. There was no system that said "this invoice is already paid". There was no system that said "this delivery note matches that invoice". There was no system, really. There were two people, each in their place, doing their job well.
When Hidalgo — or any other supplier — sent the invoice through both channels, because he knew that way he was more likely to get paid sooner, the invoice came in twice. And sometimes it was paid twice. Not always. Only when Mario happened to scan the delivery note days later and the name didn't ring a bell to Carmen, or she didn't remember she had already paid it, or it was month-end and she was paying in bulk without looking too hard.
It happened to Carmen, silently, twice a year.
What you find when you do the math
The manager found out about Hidalgo because Hidalgo, grateful but honest, sent an email saying he was refunding the duplicate payment. The manager read the email twice. He called Carmen.
—Does this happen more often?
—No, not at all.
Carmen said it with conviction. She really thought so.
The manager, that afternoon, asked his accountant to pull the last three years of movements. He cross-referenced amounts against concepts. It took two days. He found seven duplicates. Two had been refunded by suppliers. Five had not. Total: nine thousand one hundred euros that the company had paid twice over three years. Money that had not come back. Money that was in other companies, not in his.
—Nine thousand one hundred —the manager said.
—That can't be —said Carmen.
But it was. It was nine thousand one hundred euros and the trail was in the bank statements.
What didn't come out
That's what came out. What didn't come out was the other thing: how many invoices had been paid wrong, with wrong amounts, on wrong dates, to swapped suppliers. How many times Carmen had paid Hidalgo what was meant for Hidalgo Hermanos, a similar company with a different IBAN. How many times Mario had signed a delivery note for material that hadn't arrived. That didn't come out in the cross-reference. That doesn't come out in any cross-reference, because to find it you need to know what you're looking for.
The manager understood, that night, that the problem wasn't the nine thousand one hundred euros. It was that in the company there were two doors for the money and nobody had put a guard at either one. Trust in Carmen and Mario was total and well deserved. Trust in the process, however, wasn't justified. Nobody had designed the process. The process had grown by itself, like grass in a crack.
What a system does, when there is one
A system doesn't replace Carmen or Mario. It does something more modest: it closes the doors that shouldn't be open.
When an invoice comes in, the system recognises it: the supplier, the amount, the date, the number. It checks whether the invoice already exists in the database. If it does, it flags it. It doesn't send it to payment without a human looking at it twice.
When Mario receives a delivery note, he logs it in the same system. The system matches the delivery note with the invoice. If they match, it approves. If they don't, it leaves it pending and flags it.
When the payment goes to the bank, it goes through one channel, with one control, with one record.
There's no magic. There's no artificial intelligence. There's a system that knows what has been paid and what hasn't. It's the minimum. It's what in a five-person company one person does. And in a fifty-person company a system has to do, because there's no person capable of holding twenty thousand invoices in their head.
Carmen, afterwards
Carmen had a conversation with the manager. An awkward one, on both sides. The manager told her it wasn't her fault. That the mistake wasn't hers. That she had been twelve years at the company and that of those twelve years, eleven had been impeccable. Carmen barely said anything. She nodded and looked at the table.
The next day Carmen asked that the new system be decided between her and the manager. That she knew the particularities of each supplier, what each one demanded, what each one billed badly and how often. That without that information the system wouldn't work.
The manager agreed.
Three months later, Carmen opened every morning a screen that showed her the day's invoices. When there was a duplicate, the screen flagged it in orange. Carmen looked. She decided. She approved or rejected.
—How's it going? —the manager asked her one morning.
—Going.
She said nothing more. She didn't need to. The difference between the "it works" of before and the "going" of now was one word. But both of them knew it was something else entirely.
The cost of a process nobody designed
Most administrative errors in small companies aren't errors. They're processes nobody designed: that grew by themselves, like grass in a crack, over years. Two people doing their job well, in two different places, without the information ever crossing paths.
A system doesn't replace people. It puts a guard at the doors that had been open for years. When an invoice comes in, it checks whether it already exists. When a delivery note arrives, it matches it with its invoice. There's no magic. There's a thought-out process and a system that enforces it.
How many duplicate or mispaid invoices in your company has nobody found yet?
If invoices come into your company through several channels and nobody has the full picture, it's not a question of whether there are errors: it's a question of how many. Let's look at them together.
Let's talk about your admin