5 Ways AP Automation Can Eliminate B2B Payments Fraud
- 03 Mar 2022
- AP Automation
B2B payments fraud has become more sophisticated in a tech-driven global marketplace. In addition, worldwide events raise new concerns. For example, supporting remote work is crucial during a natural disaster or pandemic. Security concerns arise to maintain accounts payable automation best practices, whether working in-office or in the cloud.
Anyone without AP automation will inevitably get left behind. Staying tied to tedious manual processes means wasting time and money with inevitable errors - tallying up to additional costs to the organization.
Fortunately, AP automation can eliminate late B2B payments that damage an organization’s reputation, relationships, and production schedules. Discover five ways how automation ensures timely payments and how to establish accounts payable automation best practices in a modern business environment.
Focus on 3-Way Matching
Most manual processing uses 2-way matching to match the invoice quantity and price to the purchase order and price. While simplistic, manual 2-way matching is still time-consuming, tedious, and subject to human error. Plus, there are opportunities for fraud without the real-time reporting provided by AP automation.
The 3-way matching process adds a goods receipt to ensure the organization receives the same quantity ]ordered and invoiced. Consider the time and effort involved for manual 3-way processing. Plus, costly mistakes could mean sacrificing certain B2B relationships at a cost to your company. In addition, automation supports superior exception management for new suppliers and greater visibility for the additional approvals required for out-of-the-ordinary amounts.
Accounts payable professionals agree 3-way matching is more efficient because it includes all aspects of the purchasing process. With that in mind, AP automation seamlessly handles 3-way matching for superior speed and accuracy. Plus, eliminating mistakes means no more costly errors - or fraud - for your organization.
Establish Controls and Checkpoints
Another way to eliminate B2B payments fraud is to establish controls and checkpoints for approved AP automation users. A best-in-class AP automation solution permits levels of control, scalability, and specialization to keep track of all users in real-time.
In addition, establishing internal controls and checkpoints to review invoices ensures accuracy every step of the way. With time-consuming manual processes, often only one or two sets of eyes approve invoices - which is not enough to prevent and detect fraud properly. However, AP automation offers multiple checkpoints to ensure accuracy.
Plus, real-time reporting makes it easy to detect inconsistencies before they become costly problems. Identifying potential fraud saves organizations time, money, and their brand reputations.
Checkout Suppliers - External Fraud and Anomalies
Checking out suppliers and invoicing is crucial to prevent external fraud and anomalies. For example, detecting false supplier accounts and email can top fraudulent activity in its tracks. According to The 2021 AFPⓇ Payments Fraud and Control Survey:
- 61 percent of treasury and finance professionals report their AP department is most vulnerable to business email compromise (BEC);
- BEC is the primary source for attempted or actual payments fraud at 62 percent of the surveyed companies; and
- Sixty-five percent of finance professionals feel the pandemic is at fault for some payments fraud increase at their organizations.
As a result, supplier vetting, verifying their validity, and ensuring the correct terms throughout the payment process is critical to detecting external fraud. In addition, AP automation also picks up anomalies, such as spikes in pricing or gradual price increases over some time.
By streamlining the vetting, procurement, and payment processes, end-to-end automation helps identify potentially fraudulent activity before it becomes costly to the organization. Plus, automation detects anomalies to ensure contract compliance and eliminate possible fraud.
Secure Cross-Border Payments
Before recent global events, the AP team faced typical bottlenecks in B2B payments, including invoice matching, matching errors, and slow processing. Scrambling to support remote workers and post-pandemic evolutions meant more bottlenecks - and an increased risk of fraud.
Eliminating paper is a top priority to remain competitive in a tech-fueled global economy with a focus on green practices. As a result, AP automation is an effective way to eliminate paper checks and invoices that slow down the AP process and leave room for potential fraud. Thus, organizations saddled with manual processes and partial automation face an increased risk of undetected fraudulent activity.
B2B payments fraud is preventable by following the current trends and automating all processes. Trends in B2B payments include:
- Increase of digital remittances for global financial inclusion and faster payment processing
- Growth in international cross-border payments
- Expansion of small businesses via e-commerce, increasing the number of cross-border payments.
- Informal adoption of Central Bank Digital Currency (CBDC) for digital cross-border payments, based on a cryptocurrency model
As digital payments become the standard, AP automation is necessary for timely processing and eliminating potential B2B payments fraud as technology evolves.
What is the Best Accounts Payable Automation Solution?
The intelligent adoption of a total AP automation solution is the most effective and affordable way to eliminate B2B fraud. But what is the best accounts payable automation solution for your organization’s needs?
Most organizations realize an ROI within a few months of investing in a robust AP automation solution. Features to look for include:
- Cloud automation for real-time collaboration and reporting to prevent fraud
- Single user experience to capture and process invoices without lapses or confusion
- Automated coding fueled by AI and machine learning to improve compliance
- A touchless and paperless process with minimal human intervention
- Seamless integration into current AP processes and practices.
Establishing accounts payable best practices starts with streamlining processes, ensuring timely payments, and eliminating fraud. Adopting AP automation today helps the organization realize a measurable ROI tomorrow.
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