Can digitization help prevent fraud in accounts payable (AP)? AP fraud is the biggest pain for businesses, which is costing organizations more every year. Accounts payable is where fraud can be committed easily. Preventing accounts payable fraud can seem increasingly overwhelming as invoice and account data all in need of protection against scams. However, putting in proper controls and systems can help combat fraud easily.
One way to prevent fraud is by using cloud technology that automates AP processes and provides extra barriers that can help prevent fraud. The controls put in place by AP automation will have a significant impact in protecting data from fraudulent activities.
Anti-fraud Mechanisms of AP Automation
Automating AP processes offer the greatest level of transparency and accountability as every payment made must go through the system. No matter what issues might arise, transaction details can be found quickly and easily, which is the key to internal fraud prevention.
Automated AP software offers three key benefits that help fight against fraud and keeps business transactions secure.
Traditional AP processes are stuck with thousands of paper documents, which resulted in documents being lost or present opportunities for fraud. Automation makes it easy to fill all documents, but, more importantly, the complete lifecycle of invoice and receipt can be improved. This makes it easy to track any activities, who is doing what, exactly when and why. In addition, automated solution identifies missing invoices and tracks vendor price changes, a sudden increase in invoice volume and flags any modifications made to invoices.
In Accounts Payable, access has always had to be controlled. With cloud technology, access can be even more effectively policed through AP modules. Electronic invoice systems can assign specific responsibilities to specific teams, restrict functions to only a few and avoid unauthorized access to invoices.
This segregation of AP operations can result in greater compliance and accuracy, and offers a highly effective security against internal fraud.
Set Workflow Practices
Efficiency is important in the AP department. The volume of paper to be processed and the crunchy deadlines are the key culprits of process inefficiency. Sometimes, approvals were made just to push payments. The task of verifying each invoice comes with many discrepancies. Employees are more likely to be tempted by fraud.
AP solution allows businesses to set the best practices, which not only improves workflow, but also establishes step-by-step procedures for simplification of the processes. This will include multiple approval workflows or mandate pre-approval review process. As all rules and processing policies are applied in the real-time, the system will automatically prevent anyone from bypassing them.
If you want to get serious about mitigating fraud, AP automation is what you have to consider. Additionally, cloud solution offers huge benefits in terms of improved efficiencies, time and cost savings, thus alleviating employee frustration altogether.