How touchless AP is feeding the invoice fraud beast

Are touchless accounts payable processes making it easier for criminals to commit invoice fraud? 

The simple answer is yes, because now we increasingly rely on automated checks, and on the initial inputted data being correct. In truth, while we now have sophisticated ways to pull data from a document, validate invoices, and cross-check POs and invoices for correctness, fraud can still fall through the cracks. 

The increase in the frequency, types and cost of invoice fraud (45.9m accordingly to Barclays), now puts greater pressure on governance and control. The the ‘eyes-on’ approval process is limited to spot checking invoice exceptions, and this can spell trouble.

Many organisations we speak to firmly believe that they have the systems and processes in place that ensure they don’t carry any financial risk, that they cannot be tricked into paying a fraudster. But in reality, the challenges, stresses and conflicting priorities of today’s businesses make it easy for fraudsters to gather enough tangible information about their targeted organisation to pose convincingly as their supplier. In some cases, receiving multiple payments before the crime is discovered or when the legitimate supplier complains about non-payment of invoices. At this point, the recovery and return of funds from the fraudulent account is virtually impossible.

According to Experian’s 2023 identity and fraud report, nearly 70% of businesses report that fraud losses have increased in the last few years.

Using technology to reduce invoice fraud risk.

Digital transformation holds one part of the key to invoice fraud reduction, offering seamless, touchless order processing and payment transactions, so that the incidents of manual handing errors are removed. However, this can then open up the risk of loss through cybercrime and spoofing, organisations are struggling to keep up with the sophisticated nature of invoice fraud attacks. 

In many industries there is an expectation that duplicate payment and credit processing is a standard part of the accounts payable process, however this is where fraud and error can hide. Processes and technology are in place, but we all know that over time, controls lapse and processes change slightly, especially when there is a high staff turnover. 

Some legacy practices such as simple 2-way or 3-way matching (of purchase orders, invoices, or delivery receipts) can provide some security, but are useless if your organisation processes hundreds of invoices a week and the fraudulent change has been made to the Master Supplier File.

Fighting the battle of payment error

Holding the full set of keys, checking the checker, being able to have the final go/no-go on a payment run really does provide the assurance across the business that the finance controls are robust and delivering value.

Our software solution reviews 100% of your transactions prior to payment being made. We continuously identify hundreds of P2P anomalies (supplier file changes, PO errors, duplicate invoices and fraud) that require further investigation.

Utilising any ERP system data on a daily basis, our solution provides the results of complex analysis and financial logic in understandable and easy to act upon dashboards, along with the option to validate or rectify anomalies, we also highlight areas to investigate such as fraud risk.  

We find that our customers see results within days, have the confidence to promote best practice and payment governance.

Monitoring spend to prevent invoice fraud

Nobody wants to believe that they are still processing errors, especially after major investment in finance systems. However, no organisation can fully safeguard their profits, unless they continuously monitor their spend.