Here are five steps to help protect your business against payment fraud

As consumers increasingly use digital channels to replace and supplement in-person interactions, digital payments fraud is on the rise. The rapid shift to digital is causing a surge in fraud worldwide.

pexels rodnae productions 7821514 1024x620 1

The threat to companies doesn’t come from the outside. Internal fraud is rampant in departments responsible for supplier payment, particularly with remote staff.

Digital transformation and remote work have posed new challenges for business controls.

Ryan Mer, CEO of eftsure Africa, says that companies need to improve their cybersecurity and antifraud solutions. While implementing internal controls can take time, it is essential that there are strict controls in place to prevent opportunistic and organised fraud activities.

His company, a Know Your Payee platform provider, is working to protect businesses of all sizes from this global threat. Here are five ways to make Accounts payable department as efficient and effective as possible, from digital security to simple invoice numbers.

1. Always use invoice numbers

Simple tools such as invoice tracking can often prove to be very useful. Both your accounts team as well as your suppliers should have access to invoice numbers. This allows everyone to quickly identify which invoices have been paid, and helps avoid duplicate payments.

Your team should always refer to the invoice number when making a payment. Suppliers will have difficulty tracking their payments otherwise. You can query your team or issue duplicate invoices.

Your team should follow a system that standardises invoice numbers from different suppliers.

2. Embrace technology

Real talk: Even your most trusted team members may make mistakes at one point. They’re human. To minimize human error, automate as many manual processes as possible.

KPMG conducted a study in Australia that found 25 percent of Australian vendors had anomalies. A web interface payment system can save businesses half an hour each time they change or add a supplier, and one minute every time you check a single bill. These savings can add up over time and become very significant.

A web interface that is well designed will save you time and money.

3. Don’t compromise on security

Fraudsters take advantage of this by combining account numbers with business names at financial institutions. Your accounts team must have measures in place for verifying account numbers with numbers.

Never compromise security with your enterprise resource planning system (ERP). After 300 successful exploit attempts against its ERP system over the past six months, a popular ERP system had earlier this year to issue a warning.

You must ensure that your ERP system does not leave you vulnerable to security breaches.

4. Keep on top of your communications

Electronic record keeping systems should be in place to allow your receiving department to keep track of any physical goods purchased by the organization, whether it is large quantities of stock or small packs of pens for the office.

Next, you can streamline communications between accounts payables and receiving and ensure that communication is continuous. Receiving records can be logged in your ERP system. This allows you to check which items were ordered according to the purchase order. It also facilitates three-way matching, so the accounts team is aware that the invoice is accurate and legitimate.

Make sure your accounts are strategically aligned to procurement. Also, have approvals in place for limiting fictitious suppliers.

5. Segregate duties

Account payables should have multiple people responsible for different tasks. This is one of the best internal controls. A task should not be completed by one person.

It is possible to increase losses due to errors by not segregating tasks. Busy staff can easily make mistakes in data entry. Your team will be able to spot most errors before you make a payment.

Internal fraud is even more serious than human error. Ask any auditor, and they will tell you that segregating tasks is the best way to manage both human error as well as internal fraud.

Mer concludes, “Following these simple steps in your Accounts payable department will allow efficiency, streamlined processes, and prevent fraud from affecting your bottom line.”

Get latest news from African Startup ecosystem

Latest stories

You might also like...