One might think that by virtue of us living in the modern age, that we’d be past many of the uglier parts of society that rear their head now and again. In particular things like fraud or schemes to make oneself rich at the expense of a business or other organization. Unfortunately as it says in the good book, “there’s nothing new under the sun” and “the heart of man is desperately sick”. So, while we don’t relish covering this area of enterprise, it is something necessary to revisit every now and again and after having read this little ditty over here, we thought we’d chime in with a solution that might be meaningful to Finance and Accounting leaders who are looking out for their organization’s best interests. While there are certainly are some gems to glean from the referenced article, suffice it to say that most businesses stink at ensuring proper controls and safeguards are in place over their invoice processing function that would stop the existence of accounts payable fraud in their process.
Not surprisingly there are numerous ways that technology can assist in bringing fraud instances to a screeching halt.
Three ways to stop Accounts Payable Fraud
1. Basic Data Checks - Unless you are freed from being perpetually pinned to the mat (so to speak) by data entry, you’re going to be at a bit of a loss here. The premise that we’re getting at is that you really need to use your data to it’s fullest effect. Essentially, data is viewed in a manual invoice processing environment as something that must be crunched just to keep the process churning, and while that’s fine (if you have a low standard for ‘fine’), it doesn’t help you when it comes to leveraging the data to perform additional checks. In the case of manual, all these data checks would just equate to more human process which is most likely why so few organizations do anything proactive. It’s hard enough for most AP departments to keep their head above water with what’s on their plate already. So, if you have solid accounts payable software with some advanced business intelligence capabilities you can automate validation mechanisms to look for something as basic as an invoice containing a certain invoice number, certain vendor, and total amount. By evaluating previously processed invoices for those three criteria you can eliminate duplicates and prevent some instances of fraud, and that’s just one example. There are many ways to slice and dice the data from your process and latent within your invoices to optimize business outcomes and secure your business.
2. Escalation - Again one of the implicit assumptions here is that you’re using some kind of workflow technology. If you’re in a manual processing scenario, it’s almost an ‘exit stage left’ moment, because you don’t have this working in your favor. Again, to the point, this is where accounts payable software can absolutely make or break you, especially for the wise ones tapping into dynamic workflow capabilities layered with advanced business rules. By ascribing your business rules to run the workflow automation you can enforce approvals and signing authority for high dollar invoices. At a minimum this thereby introduces a secondary level of approval and can eliminate the potential for inauthentic invoices of high worth to make it through the process.
3. Address Validation - While this point is a hybrid of both sound vendor master data management and dynamic data parsing it should drive home the potency of accounts payable software working on your behalf to both streamline and settle your process from potential inconsistencies. Essentially, any invoice that comes in from a certain vendor can and should be bounced against your vendor master data to ensure that a valid vendor hasn’t been assigned a bogus address by some would be saboteur.
Ok, that’s it for today. Short and sweet and evident of the high capabilities to drive tangible value back to your accounts payable process.
If you want more intel on how to really juice your accounts payable process for all it’s worth then dig into the e-book below...you’ll love it!