Stop Invoice Fraud, Minimise Human Error, and Improve Compliance
There are many challenges relating to the AP process, but one area that often gets overlooked is the impact of fraud, human error and compliance on the bottom line. In our talk Invoice Fraud, Minimise Human Error and Improve Compliance, we look at practical tips to tackle these three critical concerns of AP teams, and I have summarised some of these points below.
Tackling Fraud in the AP Process
According to the Association of Certified Fraud Examiners, organisations lose 5% of their revenues each year to fraud. Few finance managers we speak to would disagree with this figure. It’s a huge sum of money – especially when you consider how much sales and marketing teams need to spend to make up that lost revenue. So how can organisations tackle it?
Good practice is to segregate duties – for example, make sure that the people who do the payment runs don’t also have access to change supplier bank details.
Next is to make sure you have effective communication within the team. In the past year, AP teams have gone from solving problems shoulder to shoulder to working remotely. It’s opened up a world of opportunities for fraudsters to sneak into the gaps. The key is to ensure you have robust workflows in place that have to be followed, with no exceptions such as one-off approvals.
Automation solutions such as Concur Invoice and Concur Request help you by automatically flagging up duplicate invoices and discrepancies, so there’s less risk of fraudulent spend slipping under the radar.
Minimising Human Error in the AP Process
The reality is that in manual workflows, there are keying errors. It’s generally accepted that this is around 1%. It doesn’t sound like a lot, but when you consider that a typical invoice and associated purchase order has 70 data points, you can start to see the scale of the problem. It isn’t anyone’s fault, it’s just the nature of a manual process.
To minimise duplicate payments or data errors, it’s vital that you capture information in a consistent way. For example, we often hear from AP teams that Amazon Business invoice numbers are very long, so abbreviated numbers are used. But you need to have a consistent policy so you know which bit of the invoice number is the bit that needs to be rekeyed – or there’s a risk you’ll pay it twice because it’s been entered by two different people capturing two different sections of the invoice number.
Invoice Capture uses optical character recognition (OCR) technology backed up with our human team to ensure further accuracy. It means that every piece of data from an invoice – right down to line item – is automatically captured. It’s a solution that improves accuracy while also accelerating invoice turnaround times and eliminating tedious data entry.
Enhancing Compliance in the AP Process
Compliance starts at the top so it’s vital to set a good example at management level. For example, if people see their leaders bypassing the purchase order process, it’s easier for everyone to do it.
An automated invoice process builds your policy into the process. It makes it simultaneously easier to follow the rules and harder to ignore them.
When it comes to compliance audits, we often hear that they are far too time-consuming simply because it takes so long to find the original invoices for transactions. It’s a cause of huge stress and frustration for everyone involved.
The solution is to digitise all your invoices. When all your AP information is in a digital format, data is more easily accessible much more quickly, which reduces the audit time. For example, one financial controller we worked with took their audit time in Accounts Payable from two and a half weeks to four days.
Digitising your invoices brings other benefits apart from easing the audit process.
For example, we spoke to one business that stored its invoices in the basement of their building. All the invoices were all lost when the building flooded. In another business, the finance director had moved to a different city. Invoices were being couriered to them each week – and just a couple of months into the new arrangement, they’d already had significant numbers going astray.
With SAP Concur solutions, your data is securely stored in the cloud. It means its safe from risks such as fire and flood, not to mention taking up less physical space. It’s also accessible from anywhere, which facilitates remote and hybrid working – a must for many businesses nowadays.
How Invoice Automation Supports the AP Process in These Three Areas
AP automation has the power to help you combat all these problems. It delivers a big return on investment when tackling fraud. Its ability to minimise human error resonates particularly strongly with AP teams. And its ability to enhance compliance is especially invaluable when it comes to audits.
To find out more, listen to the Stop Invoice Fraud, Minimise Human Error, and Improve Compliance talk or get in touch with one of our invoice automation specialists.