4 tips for preventing Accounts Payable fraud
torsdag, 26 maj 2016
Many accounts payable professionals work diligently to implement fraud prevention controls in their invoicing processes. However, despite their best efforts, fraud is a more prevalent occurrence in many organizations than most employees realize. Here are a few tips that you can use to identify and prevent fraud in your organization.
Tip 1: Monitor requests for duplicate payments
Although suppliers may not want to intentionally defraud an organization, there are instances where a vendor sends a duplicate invoice. As a result, duplicate payments are made for the same goods or services. Most Accounts Payable solutions will perform a duplicate invoice check. And while some checks are more robust than others, ensuring that all payments are made through the Accounts Payable solution ensures that duplicate requests are caught.
Tip 2: Define roles and authority carefully
An important control to put in place to prevent fraud is ensuring that employees don’t have more authority than is needed to perform the duties of their role. For instance, employees who create invoices should not be able to approve those invoices. Instead, invoices should be routed to the correct approver who has the authority to sign off saying that the vendor can be paid for the delivery of goods and or services. In addition, the approver’s authority should be limited to approval only - and should not include the ability to perform certain invoice edits like changing the supplier on the invoice or making modification to vendor master data.
Tip 3: Build strong process integration between Procurement and Accounts Payable
Strong process integration between Accounts Payable and the Procurement function ensures that goods or services are ordered according to purchasing policy, and that they are appropriately received before the invoice is paid. A strong relationship between Procurement and Accounts Payable empowers Accounts Payable staff to understand the organization’s buying habits, and to question whether or not an invoice may be valid. The second set of eyes can be helpful in preventing in a fraudulent payment.
Tip 4: Use data to uncover trends in supplier invoices
Data rich organizations can identify overpayments to their suppliers by monitoring trends in supplier performance or supplier spend. While this is a more reactive method, using data to understand your organization helps to detect when something has gone awry. Organizations can take a more proactive approach to preventing duplicate payments by defining parameters that identify potentially fraudulent invoices and routing these invoices for someone to review.
Completely eliminating fraud from your invoice process is impossible. However, there are ways to minimize your exposure.