CloudX Blog

3 Ways To Stop Accounts Payable Fraud With Accounts Payable Software

Posted by Chris Cosgrove

Aug 25, 2017 12:50:32 PM

Accounts Payable software stops Accounts Payable Fraud!

Sometimes You Have To Deal With The Ugly Things

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’ll love it!

Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Process, accounts payable software, Invoice Processing, accounts payable fraud

The Virtues and Perils of Going It Alone Without Accounts Payable Software

Posted by Chris Cosgrove

Aug 23, 2017 12:10:47 PM

Belichick and Brady believe in the power of accounts payable software to win championships!

The Myth of Overnight Success

You know all too often we look to one hit wonders and overnight successes as the model of greatness that many people aspire to, but few will ever achieve.  When we assess what someone else has done that is novel or noteworthy, we sometimes get the deer in the headlights effect where we fail to realize the preparation that’s happened prior and off-scene to enable that person to achieve whatever they have done.  I suppose if we stepped back and hit the rewind on the scene we’d see something truly remarkable...someone committed to a almost sacred trust oriented towards consistent effort and improvement in the pursuit of a worthwhile goal.

To fall in love with the process of betterment is a difficult thing to do, but if it can be embraced the results can be quite astounding, and it’s no different in Accounts Payable, albeit somewhat less glorious.

Consider Bill Belichick’s commentary on his protege, but now proven QB, Tom Brady...Belichick said this off him, “ not all about talent, it’s about dependability, consistency, being coachable, and understanding what you need to do to improve.”  He essentially was pointing out that Brady is not the greatest physical specimen of a QB and that everything he’s achieved, 7 NFL Superbowl appearances, and a whopping 5 Superbowl Championships, has been attributable to his ridiculous work ethic.

If we could glean that little nugget of a soul fully invested and applied, we’d find something of great worth I think.

As it relates to Accounts Payable, we want to take a brief look at the virtues of going it alone without the luxuries afforded through automated Accounts Payable software, and believe it or not there are some.

From a shortlist perspective, not having solid Accounts Payable software you’re forced into the reality of the following:

Hard Work - So essentially, if you’re not leveraging a machine automation approach to rip data off invoices, you will certainly be working hard because you’ll have no other choice.  You’ll be in a world governed by data entry and manual matching processes, and this can only scale on a headcount based model absent technology to level the playing field.

Honesty - However, this will keep you honest, or at least leave you busy enough that you won’t have time for much else.  In a manual invoice processing environment you certainly won’t have time for idleness, which in and of itself is meritorious.

Beyond those couple examples, we think the virtues of manual Accounts Payable are outstripped by the inconveniences and challenges that surround it.

If discretion is the better part of valor, then it would probably be wiser to employ a method to move away from manual efforts and embrace the power of automation than to continue with the vainglory that stems from going it alone and suffering through arduous process.

The downsides to manual processing if summed up might look like this:

Burnout and turnover - One of the challenges of manual Accounts Payable processing is the grind that is required to enter, match, and pay invoices.  This, combined with the fact that it is not a highly skilled trade, invariably leads to a high turnover rate within the ranks.

Lack of visibility - Again, when all data is mired in manual data entry, there is virtually no semblance of visibility to process data until the point of entry.  Essentially, when AP gets an invoice it can be processed and the data utilized, but prior to that everything is essentially a fog, and as such you don’t typically have the ability to triage an invoice through a workflow or accelerate, pause, or delegate processing to another party.

Missed Opportunities - This can lead to missed opportunities on the payment execution side.  That would include opportunities to capture early payment discounts, but for some laggard type organizations it can mean worse than that and ultimately cost them additional fees as it costs extra due to late payment fees.

Hopefully we’ve expounded enough on the merits of automation and Accounts Payable software to at least pique your interest in exploring it further.  Granted it can be a long journey, but nothing worthwhile is accomplished hastily.  Remember, going back to the foundational elements we began with...being coachable, being consistent, being dependable, and understanding what you need to do to improve...are the framework for success in any venue, accounts payable automation notwithstanding.

Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Automation, accounts payable software, Invoice Processing

Strategies for dealing with Accounts Payable Process improvement haters

Posted by Chris Cosgrove

Dec 22, 2015 9:58:40 AM

Don't let haters deter your Accounts Payable Process transformation efforts!



Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.

Steve Jobs


Opinions are like belly buttons...everyone’s got one.


One thing is for certain, he wasn’t cowed by too many folks in the pursuit of his dreams, and we’d argue that he was steadfast even in the face of numerous opinions of people who just didn’t get what he was trying to do.  Such is the fate of anyone taking on a worthy initiative.  Why should this be any different for those who are trying to champion Accounts Payable automation.  The thing is, that unfortunately, many corporate leaders are legacy and due to political power structures, or departmental silos, turf wars and skirmishes emerge over who is going to champion a process improvement project.  And so dies many an initiative before it ever had a shot of getting off the ground.


So, from our heart to yours, we want to equip the person who has a vision and a dream to transform the nature of their Accounts Payable process with the tools they’ll need to eviscerate, obviate, or otherwise derail any would-be hater that comes their way.


Numbers don’t lie.  

If you’ve done an exhaustive assessment of your current accounts payable process, you’ll know how you stack up to other companies from a benchmarking standpoint.  In our experience it’s the majority of CFO’s that don’t actually have a firm handle on what their unique business metrics are from a processing perspective.  For example, items deemed non-critical often get little attention.  With regards to invoice processing, the cost to process an invoice can vary wildly from around $3 per invoice in a highly automated environment to over $15 in a paper-centric, manual environment.  Consider the delta of $12 per transaction times the number of transactions.  At a mere, 1,000 transactions a month, the difference would be a swing of $12,000 to the good (or bad depending on your.  Invest the time to analyze where you can slash wasted cost and bring your analysis to the forefront in the conversation.  Oh yeah, by the way, we offer that up as a freebie if you want some help with that...just click here!


Drive strategic value.

Sometimes cost-cutting isn’t enough.  As an example, cost cuts can mire down between hard and soft expenditures, and some organizations won’t affect active headcount reduction to achieve certain hard savings.  Others may push costs (labor) onto another task area, if someone is strategically redeployed, but strategic gains are another matter.


Consider the equation we laid out earlier on the delta of automated and non-automated invoice processing costs.  The same principle goes for check cutting.  The difference here is strategic thinking can cut certain check processing costs down to zero and be leveraged to drive operational profit.  Specifically, I’m talking about making payments strategic in the form of virtual payments.  The average cost to process a check per TAPN is $5.14.  However, on a $1200 invoice earning the payer 125 basis points, which is standard on many virtual Mastercard payment programs, the rebate earned would be $15 with a $0 processing cost.  In effect, you have a $20 swing per transaction, so assuming 1,000 checks per month, that’s a complete gain of $20,000, not just in theoretical dollars but actual rebates.  When you start talking about true cash impact, it becomes harder to hate away.

Accounts Payable automation gets juicy with virtual payments!

*Average processing costs for traditional forms of payment compared to virtual payments. - per ComData

We also are cognizant of the fact that there are certain scenarios where internal politics hamper progress, as people defend their fiefdoms or look out for their own interests.  Hopefully you can leverage some of the thinking we’re proferring to make headway even in adverse waters.  If you can’t ultimately win hearts and minds though with executive leadership, you’re likely not to affect much change operationally and if that’s the case it might be time to consider finding more forward thinking pastures.


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Topics: Accounts Payable Process, Accounts Payable Automation, Invoice Processing, Virtual Payments, virtual mastercard

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