Procure to Pay risks/Purchase to Pay risks – Top 5
The best approach when considering a Procure to Pay risk / Purchase to Pay risk mitigation process is to be proactive in using early detective techniques so you can prevent significant losses.
Procure to Pay risks / Purchase to Pay risks
What you don’t know can really hurt your organisation, and when it comes to risk mitigation, ignorance is anything but bliss. Generally speaking, your procurement process will likely face potential risk exposure from:
1. Poor spend visibility
Spend analysis is central to supporting your strategic procurement decisions. It is one of the key tools your procurement team can use to proactively manage Procure to Pay risks / Purchase to Pay risks, identify savings opportunities, and optimise your organisation’s spending power.
With FISCAL you will understand how to identify and tackle risk and fraud in your supplier base thereby increasing your chances of successfully protecting the bottom line.
Our ability to give greater spend visibility serves as an invaluable tool for large, global, diversified organisations. As a result, your organisation will gain greater insight into what it is buying and from whom, which will help you make significant savings by implementing effective sourcing strategies.
2. Unreliable Master Supplier File (MSF)
A recent study from Gartner evaluated the annual cost of supplier data management to be around $500 per supplier, though the level of accuracy is still low. Suppliers move, merge, change ownership, change names and locations…all of these impact the accuracy of your data which can cause processing errors or even worse, supply chain disruption
Streamlining your purchasing order process will result in happier suppliers, accurate-record keeping, and the elimination of human error. As part of our Accounts Payable Risk Review service, we will identify inactive, incomplete, and duplicate suppliers, and provide a report to enable you to make adjustments, and offer advice to further improve your master supplier file.
3. Non-compliance and crude contract management processes
Your supplier contracts need to be correct and legal. This means that your contract management process should address the potential risks associated with incorrect, incomplete, and outdated data.
FISCAL’s experience with complex contract compliance reviews provides you with assurance that your suppliers are performing as you would expect them to perform. NXG Forensics flags incorrect or missing data. This prevents the risk of fines from incorrect audit trails.
4. Invoice fraud
In 2019, surveys by UK Finance revealed that invoice and payment fraud costs organisations £92.7 million each year and that 43% of businesses are not aware of the dangers of invoice fraud. The cost of invoice and payment fraud is increasing and with the lack of awareness in the general business population, invoice and payment fraud will likely remain highly successful.
With FISCAL you will reduce risk and create peace of mind. Using our unique forensics and AI-driven data algorithms, we are able to track potential fraud, analyze risk areas and categorise suppliers.
5. Error-prone, manual internal processing
Manual processing amplifies supply chain risk factors considerably as you’re far more likely to make errors when forms are hand-written. Paper copies are also more likely to get lost when transferred from person to person for approval.
Migrating to paperless processing is a smart idea. Half of all business leaders identify a reduction in errors as one of the major reasons for switching from manual to automated procurement processing.
Now you have a firm grasp on the Procure to Pay risks / Purchase to Pay risks, you’ll understand why a thorough assessment is crucial.
Technology is leading the way in reducing risks in procurement processes. Reducing time spent on menial tasks, eliminating errors, and automating key functions, you’ll find procurement risks significantly lower when it’s easier to monitor the whole procurement process in one place.
Want to find out more about how you can reduce procurement risk factors with FISCAL? Sign up for our Accounts Payable Recovery Audit now.