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As the gatekeeper of a business’ cash, the accounts payable department is a likely target of fraudulent activities; AP automation can save the finance sector from such attacks.
FREMONT, CA: In the era of modern technological advancements, flexibility, efficiency gains, and new business opportunities have accelerated in the finance industry. The rise in digital payment and invoicing methods has created a world of opportunity for businesses around the globe. As technology is advancing around payables, fraudulent and criminal activities are also accelerating day by day.
Here are some ways to minimize fraudulent activities in the sector:
Securing the Company’s Cash
To make accounting fraud hard or unattainable, management in business should invest in secure and digital systems. Accounts payable automation builds a stable platform for the company’s cash flow into an airtight system. It allows establishing vendor vetting against inbound invoices and payment requests and flagging anything that doesn’t match with existing master data. These accounts payable reports can help AP managers monitor large transactions passing through AP as well as the suppliers receiving the most frequent payments.
Fraud is spreading like a forest fire in business transactions, detecting fraud is as difficult as looking for a needle in a haystack. In such cases, accounts, payable automation makes it easy to know what to look for and stop these activities before the business’ cash is impacted. Automation enables management to set up automatic checks of any new vendors being set up within the system, creating a gateway to verify vendors from potential billing schemes. It should always be performed by someone other than the party responsible for setting up the vendors initially. In the month-end process, it also monitors suspicious behaviors of any account. AP automation solutions make the standard closing period much more streamlined, giving the AP team time back to make these checks and note anything out of the ordinary. Additionally, it also verifies payments with round numbers, invoice number gaps, and unusual payment frequencies.
Reforming the Audit Process
Industry specialists suggest conducting unscheduled audits as a method for catching potential fraudsters. The progression of AP automation over the most recent ten years has significantly expanded the sum and depth of information that fall under the extent of an audit, while at the same time easing the workload of auditors having to filter through this data. Auditors profit by the ongoing updates gave via automation, realizing they can get to exact information from anyplace and anytime.