How to Strengthen Internal P2P Controls and Improve Oversight with Automation Software
Can you access all your organization’s procure-to-pay information when you need it? Is it easy to research potential issues in accounts payable? Do your employees know exactly how to comply with important financial regulations?
If you can answer “yes” to those questions, then you likely already have an efficient P2P system that provides control and oversight for important financial processes. For many organizations, though, keeping on top of P2P data, resolving issues, and enforcing important regulations is a challenge.
Strengthening internal P2P controls and improving oversight provide several advantages in the procurement and accounts payable departments. A simple way to do this is by automating the procure-to-pay process using AP and Purchasing automation software. These improvements also strengthen the rest of our organization by providing more reliable data, helping prevent fraud, and automatically enforcing company policies.
Benefits of Stronger Fraud Controls
The Association of Certified Fraud Examiners (ACFE) estimates that 5% of total revenue is lost each year to occupational fraud. Much of this fraud originates in the Accounts Payable department. Since all the money leaving a business goes through AP, it looks like an easy target to criminals outside an organization and fraudsters working inside a company.
There are several ways to strengthen internal controls to help catch and prevent account fraud. Many of these are simplified by using business process automation software. Relying on audits to catch fraud, as in a manual AP department, consumes more money and simply can’t get the job done anymore.
Automating the AP department is an essential step in cutting down on fraud and simplifying adherence to regulations such as Sarbanes-Oxley. If you automate procurement with the same software supplier, that also strengthens internal controls because it’s much easier to cross-reference invoices and purchase orders.
Catch Invoice Oddities
Next Process AP Automation software gives you the control and oversight needed to quickly deal with invoicing errors. You can access every processing detail, event, and change in the system, which simplifies audits and makes researching invoice oddities easy.
Even if there’s no fraud involved, duplicate payments can slip through the system and cost your company money. AP automation catches if two invoices have the same number or if gaps and skips in the system indicate there may have been false invoices created accidentally or deliberately.
One of the many reasons to choose NextProcess is that we offer a suite of software modules that work together to improve your financial processes. They work great on their own, and they’re even better together. Automating both AP and Purchasing, for example, makes it easy to check if invoices match purchase orders.
One of the key features of NextProcess’ software is our extensive customization options. These features give you a great deal of control over what the software looks like, how it works, and who has access. For example, the automated AP system allows you to limit how much authorization a single user has.
Segmenting duties helps prevent fraud by making sure the same person can’t create, approve, and pay a single invoice. You can further segregate financial duties by outsourcing payments using payments-as-a-service (PaaS) software. Using a trusted third-party PaaS provider keeps important financial tasks separated and reduces the risk of check fraud.
BPA software makes it much easier to enforce rules and regulations within your company. Compliance is simple because you get to customize the software to automatically enforce company policies.
For example, in the procurement department, your company likely wants to set limits on where employees can shop and how much they can spend. Often, you’ll have preferred vendors you want them to shop at, a list of pre-approved items, and rules for submitting purchase orders. Features like punch-out catalogs and item catalogs make it easy for employees to submit purchases within the system. It also automatically generates purchase orders, which can easily be cross-referenced with invoices when it’s time to pay for the purchases.
Keep Track of Vendors
AP automation keeps track of vendors so you can more easily catch oddities in the system that might indicate fraud. Sometimes when people are stealing money through the AP department, they set up fake vendors or attribute false invoices to existing vendors. With our software, you can search your vendors to check for strange addresses and other oddities that might indicate a fraudulent company.
With all invoicing activity at your fingertips, it’s easy to notice increased vendor activity and out-of-place payments that may indicate fraud. Our portal also grants your legitimate vendors controlled access to search their own invoices. If they notice a problem, they can contact your AP department as well.
Improve Employee Morale
One of the best ways to limit fraud in the AP department is to cultivate a trustworthy pool of employees. Ideally, you don’t want a high turnover rate or temporary employees working in the AP department. Address any issues that arise promptly to keep morale high.
An additional benefit to automating the AP and purchasing departments is that it makes employees’ jobs easier. They’ll have fewer repetitive tasks—like data entry—to worry about. The software is user-friendly and easy to learn. Once employees learn one NextProcess module, it’s also easy to learn how to use another.
Want to learn more? Contact us today for a software demo.