Transparency and Accountability in Accounts Payable
Transparency and accountability in accounts payable are a thief’s worst enemy. The more your process is able to efficiently track and manage invoices, the harder it is for someone to falsify invoices or payment information. No company wants to be a victim of fraud, and certainly no one thinks their employees would do such a thing. Unfortunately, an incomplete process and high confidence have led to fraudulent activities in many companies, especially in accounts payable. The saying really rings true here: better safe, than sorry. The best way to ensure that your AP department has the highest level of security possible is to switch to an enterprise level accounts payable automation solution.
Paper invoices provide ample opportunity for fraud. The most common forms of AP fraud are billing schemes, fraudulent expense reimbursements, and check tampering. The more vendors there are, the easier it is for the fraudster to pull of one of these crimes.
With paper invoices, there is less transparency and accountability. The likelihood of a disgruntled employee giving themselves an extra bonus is exponentially higher when invoices are paper. It’s not because anyone hires a criminal, but people can become stressed, and don’t always make good decisions when stressed. In a moment of financial hardship, it’s easy to slip a phony invoice into a physical pile of invoices, or to write a paper check to cover “expenses”.
Because of how busy and complex paper invoicing is, chances are that you or your AP department won’t be able to catch the fraudulent expense before it’s processed. For the most part, the AP department is slammed with manual data input, chasing down approvals, and sending checks in the mail. This means there is little to no time to verify or prevent fraud in their daily practices. The more chaotic the process is, the easier it is for fraud to slip by.
With accounts payable automation, fraud becomes obsolete. High-level automation allows your e-invoicing process to become organized and easy to track. You can see whenever someone views, edits, or creates an invoice. Every step of the process is tracked, requiring transparency and accountability throughout the entire process. The right invoicing system will raise red flags if data seems suspicious, such as an invoice reporting an unusually large amount of units from a regular supplier, stopping fraudulent behavior before the money ever leaves the company.
Additionally, the right accounts payable automation system will provide more secure forms of payment, making sure your company never sends out a paper check again. Some secure forms of payment include ACH processing, American Express P-cards, and MasterCard P-Card.
Switching to an automation solution will deter people from even trying to commit fraud, as well as interrupt the process if they do try. It’s also possible that you have an automation solution, but that it needs an upgrade to protect you better. If that’s the case, check out this link on how leveling up your automation can help increase your transparency and accountability in accounts payable, and protect you against fraud.