Unfortunately, one can easily take advantage of accounts payable processes as they get buried in the mass of hundreds to thousands of invoice submissions. All these will make the accounting process more vulnerable to fraud and overtime and it can become quite a costly problem. Avoiding invoice fraud may not be possible always, but implementing the following tips will help prevent the fraud from happening.
Matching each invoice to a purchase order and receipt will help you prevent paying for fraudulent invoices. By matching you can match orders with receivables accurately, so that you will only pay for what you get.
Review Invoice Amounts
Reviewing invoice amounts on a periodic basis will help you identify patterns and detect if any suspicious are found. Also, you will get to know whether you are getting the best deals from your suppliers. This would give you an opportunity to better negotiate with the suppliers.
Check on Vendors
Fraud invoices can be generated using fake business names or address or account numbers. So, you will have to look out for new vendors regularly so as to ensure your vendors are legitimate. If the address is mentioned as residential or post-office box, then no doubt it is a red flag. Identifying such issues makes it easy to detect invoice fraud.
Track Invoice Activity
Tracking invoices regularly helps you identify changes as on when happened. For instance, if a vendor submits 100 invoices than 50, even though they are legitimate you’ll still have to double-check with them.
Duplicate invoice payment is one of the most common invoice frauds that take place. Fraudsters may submit the same invoice twice but by changing the date, invoice number, amount or other details. Your accounts payable software has to allow fuzzy-matching that catch duplicate invoices.
Automating accounts payable department using accounts payable software will give you the tools needed to drive efficiency in the accounts payable processes. It is the most important steps you can take to stop invoice fraud.
Besides automating invoice processing, accounts payable software can catch suspicious invoices and gives you the required tools to track invoice activity and check vendor information. It creates a win-win situation for the company as well as the accounts payable department.