4 Ways You Can Use Accounts Payable Automation To Help Catch and Prevent invoice Fraud
Accounts payable is a prime target for fraud. Because so many AP departments are flooded with paperwork, understaffed, and running behind schedule they’re often seen as “easy prey.” They just don’t have the time or resources to efficiently battle fraud.
According to the AFP Payments Fraud and Control Survey, 78% of companies were targets of payments fraud in 2017. Back in 2014, it was only 62% of companies. With fraud on the rise, it’s time to get serious about ways to catch and prevent invoice fraud.
Automation is one of the best tools in your fight against accounts payable fraud. Here are 4 ways that AP automation will help you stop fraud in its tracks.
Catch Fake Invoices
One way fraudsters try to scam your company is by sending fake invoices. These invoices are often for small amounts that the scammer hopes will go unnoticed and unquestioned. They might also have the name of a legitimate supplier on the invoice in the hope that your busy AP department won’t double-check where they’re sending the payment.
With amounts payable automation, invoices that arrive unexpectedly are automatically flagged for manual review. If they don’t match exactly what the system expects, they raise a red flag so you can investigate.
Automate 2- and 3-Way Matching
To check if an invoice is legitimate, you should be able to match it to a purchase order and, depending on the order, goods received paperwork as well. In busy accounts payable departments, this is often easier said than done. Not only does it take up time, but it’s also easy to lose paperwork.
AP automation matches invoices to POs and GRs automatically. The system quickly checks each incoming invoice to see if it matches the right paperwork. If it doesn’t, the system flags the invoice for manual review so you can see if it’s fraudulent or not.
Control Access To Invoices
Paper invoices often go through many hands, both in your company and outside of it, before reaching the AP department. That increases the risk that an invoice will become lost or sent to the wrong customer. It also gives scammers a chance to intercept legitimate invoices and replace them with fraud.
In an automated accounts payable department, you can have suppliers submit invoices directly to the system. That limits how many people have access to invoices, decreasing the opportunity for fraud. AP automation systems also include controls that limit access to critical information and keep digital data private.
According to KPMG’s 2016 report “Global Profiles Of The Fraudster,” 44 percent of fraudsters are caught because of a tip, complaint, or formal whistleblowing hotline. Your employees are one of your best defenses against fraud.
It’s definitely to your advantage to give accounts payable employees access to a system that provides detailed insight into your payment process. AP automation software gives employees the tools they need to catch anything out of the ordinary.
If you’re ready to start fighting fraud with Accounts Payable Automation, get in touch with us today. We’ll schedule a free demo so you can see exactly how our system works. And if you like what you see, our team will help you get everything set up so it’s working perfectly for your AP department.