The growth in invoicing processes and digital payment has created multiple opportunities for businesses across the world. Effective gains, flexibility, and latest business opportunities have accelerated in the past decade. For this, we must be thankful to the modern age of technological advancements.
In spite of the advancement in technology around accounts payable, there is an alarming increase in fraud and criminal activities overall. But, in addition to effective optimization, technology has also provided us parallel ways to prevent the risk of exposure to fraudulent activities.
Detecting and Preventing Fraud
Fraud is mainly hidden among thousands of typical business transactions. But AP automation makes it simple to know what to search for and prevent these activities before the company’s cash gets impacted. Automation enables management to set up automatic checks of new suppliers being set within the solution, creating a gateway to examine suppliers from potential billing schemes. It can be performed by someone other than the party responsible for setting up suppliers initially.
You need to search for potential red flags among new suppliers, like missing contact information and duplicate vendor profile data to the existing suppliers. During the month-end process, typical reconciliation of accounts provides an opportunity to track suspicious behavior. Automating accounts payable makes this normal closing period more effective and optimized, giving the AP department the time back to make these notes and check anything out of the ordinary.
Transactions from the organization’s checkbook which fails to match AP entries are the major priority for investigation. In addition, invoice number gaps, payments with round numbers, and unusual payment frequencies must be examined and noted.
Keeping Company’s Money Secure
It is necessary that the management in business invest in the secure, digital solutions to prevent accounting fraud. Accounts payable automation fasten the organization’s cash flow into airtight solutions, enabling for established supplier vetting against inbound invoices, payment requests, and flagging things which do not match with the existing master data.
AP reports can aid employers to track large transactions passing through accounts payable and the suppliers receiving the most frequent payments.
Streamline Audit Process
Today, industry experts recommend conducting unscheduled audits as a way to trap potential fraudsters. The advancement of accounts payable automation in the last few years has significantly increased the amount of data which fall under the scope of audits while at the same time simplifying the work pressure of auditors to filter through data.
Auditors can benefit from real-time updates provided by automation, understanding they can access appropriate data from anywhere and anytime.
To detect fraud, accounts payable automation performs an incredible job of building a digital trail of payments and invoices, thus eliminating the past hassle of following paper steps in the invoice process. All invoices get archived and are pulled up easily for inspection, and every step of the process has unique fingerprints of whoever is involved in the process and when it has been.
Automating accounts payable also defines clearly who in the company can access crucial functionality within the accounts payable solution, establishing protocols and controls that make committing fraudulent activities more challenging.
AP fraud is an inevitable part of doing business, and automation gives organizations a sense of security as they have the tools to protect their organization’s hard cash and provide employees the act as security liaisons against fraudulent activities. A robust reporting capability, along with flexible business configurations is a major tool for companies looking to conduct business in a reliable and safe environment.