Four ways AP automation helps reduce B2B payments fraud

Fraudsters and hackers are constantly evolving and developing newer and harder-to-detect methods in plying their trade. An organisation’s accounts payable (AP) department is usually a prime target for scammers as it is here that a company processes payments to suppliers and vendors. Therefore, it is important to eliminate AP fraud in small businesses as losses incurred from such rackets can permanently cripple an organisation. It’s not too hard to pose as an existing supplier and send fraudulent invoices to an organisation or even digitally gain access to a company’s AP processes and authorise large payments. Usually, by the time such a fraud is detected, it’s already too late; the money has been siphoned off, and the perpetrators are long gone.

Incorporating modern processes into your organisation’s AP operations can significantly reduce the associated risks and aid in timely AP fraud detection in case of a security breach. Here are four ways an organisation can protect itself and help preventing fraud with AP automation.

Move beyond paper-based manual processes:

Organisations that defer the modernisation of AP processes — preferring to stick with outdated methods such as manual extraction of invoice data and paper cheques — are at a greater risk of being targeted by fraudsters. Incorporating intelligent data extraction tools to process invoice data can considerably speed up the process, eliminate errors, and highlight inconsistencies. Modern electronic payment methods are secure and convenient compared with paper cheques, which are easier to forge. Staying updated with and employing the latest digital processes is a major deterrent to fraudsters searching for easy prey.

Keep tabs on vendors and suppliers:

One way that fraudsters avoid detection is by masquerading as legitimate vendors and sending in email invoices with minor discrepancies in addresses or account numbers. Such invoices are hard to spot without a dedicated system to confirm that the details in each invoice perfectly match up with the details of vendors on record. A robust AP automation solution can swiftly identify and flag minute discrepancies, the kind that manual processes tend to overlook. Such a solution prompts the AP staff to check in with vendors if an invoice includes a new address or inconsistent account details and clear any legitimacy doubts before processing payments.

Track and regularly analyse invoice data:

Keeping tabs on invoice activity over time can determine normal operational patterns in the AP workflow. An analytical AP automation solution can immediately identify any unanticipated deviation from established patterns. For example, if it has been the norm for an organisation to receive an average of 4–6 invoices a month from a supplier, and the number suddenly spikes, this inconsistency will be immediately flagged. Modern automation tools employ artificial intelligence and machine learning algorithms, which is impossible for fraudsters to bypass and deceive and are an invaluable tool in AP fraud detection.

Scrutinise invoice amounts:

Fraudsters perform years of research, stealthily monitoring communications and internal processes before launching a large-scale attack on an organisation. It isn’t much of a stretch to assume that confidential information, such as your AP department’s payment review and approval processes, could be in the hands of such miscreants, and they may commit payment fraud. For example, the knowledge that invoices for over a certain dollar amount face additional scrutiny before getting approved can prompt impostors to send in multiple invoices just below this amount to bypass the added layer of security. Automated AP analysis tools can flag such suspicious invoices for a closer look as well as alert AP staff when invoices from trusted vendors deviate from past payment patterns.

For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms, will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.

How can Infosys BPM help?

AP departments face constant pressure to reduce costs, increase efficiency, and eliminate errors in the invoice-to-payment workflow. They are regularly targeted by fraudsters looking to make a quick buck. Incorporating automated AP tools is a great way to streamline payment processes and eliminate accounts payable fraud in small businesses. The Infosys  Accounts Payable on Cloud platform is designed to modernise AP functions and includes strategic tools to identify and prevent fraudulent activities, protecting an organisation from unexplained losses.

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