Ardent Partners research showed a spike in fraud activity during the pandemic, that unfortunately continues today. Cyber-criminals became more brazen (and more technologically advanced) since the pandemic began, resulting in billions of dollars of fraudulent payments and activity over the past several years. Fraudsters aren’t going away and the attacks will continue, however, and AP teams need to be better prepared to identify and mitigate fraud risks from occurring.
In that vein, here’s a new PayablesPlace listicle:
Here are 7 key things that Accounts Payable can do to identify fraud:
- Regularly review vendor and payment records:
- Reviewing vendor and payment records on a regular basis can help identify any irregularities or inconsistencies. This includes checking for duplicate invoices, payments made to unknown vendors, or unusual payment amounts.
- Verify vendor information:
- Verify vendor information such as name, address, and tax identification number to ensure they are legitimate. This can include checking for any red flags such as PO boxes or fake addresses, or conducting background checks on new vendors.
- Implement segregation of duties:
- Separating duties such as invoice processing, payment approval, and check signing (if still using paper checks) can help prevent fraud by ensuring no single individual has too much control over the payment process.
- Use electronic payment methods:
- Implementing electronic payment methods such as virtual cards, ACH or wire transfers can help reduce the risk of check fraud and ensure payments are made securely.
- Conduct internal and external audits:
- Regular internal and external audits can help identify any potential fraud risks and weaknesses in the payment process. This can include reviewing policies and procedures, conducting interviews with employees, and analyzing payment data.
- Train employees on fraud prevention:
- Providing regular training to employees on fraud prevention and detection can help raise awareness and ensure everyone is aware of the warning signs of potential fraud. This can include providing examples of common types of fraud and tips on how to identify and report suspicious activity.
- Automate, automate, automate:
- The best way to combat fraud is constant vigilance and active monitoring tools that limit fraud attempts from happening in the first place. Automation, now more than ever, is critically important. AP can create enormous value for the enterprise, but only if the function can focus on the more strategic aspects of the operation and this begins with the automation of AP operations.
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