Large and small businesses struggle with risk mitigation. They put in resources to ensure they prevent their businesses from failing due to fraud. Fraudsters are constantly working around the clock to ensure they develop new tricks and ways to penetrate the business arena. With internal fraud on the rise, organizations are automating their processes to cut down labour costs and increase efficiency.
Among the popular automation processes used in many companies is automating invoices. Internal fraud is rampant in many companies. The accounting department plays an integral role in any business, ensuring things are in place. With business owners having more than they can chew on their plate, dishonest employees get to take advantage of accounts payable. Let’s dive into the four ways automating invoices will reduce the risk of fraud:
1. E-payments are safer than paper checks
Many businesses have been victims of paper check fraud. Paper checks provide an easier way of replicating account information, making it easier for fraudsters to take advantage. With more than 75% of businesses being victims of accounts payable fraud, small and large businesses have realized the importance of automating invoices.
Automated invoices have proven to be safer compared to manual processes. Vendors do not need to worry about their payments since they are encrypted and verified electronically. The system quickly flags out the suspicious activity by identifying duplicate invoices and payments. It makes it easier for any business to curb such malicious activities.
2. Automation improves internal controls
For any business looking to succeed, it must have internal controls to keep operations in check. Some may use multi-level approvals or ensure that the owner is the only one responsible for signing checks. With the high demands in the business world, organizing and analyzing such information is challenging if operating manually.
Having to deal with several invoices at once can be daunting. With most organizations adapting to the new norm, employees have had to work remotely and physically away from each other. It increases the chances of fraud since doing follow-ups is not easy. As a result of this, automating invoicing has provided room for enhanced payment controls and segregation of duties.
3. Automation provides better visibility
It has become more challenging to handle invoices manually when operations are being carried remotely. Performing invoice approvals has become more challenging, giving room for internal fraud. Without an efficient invoicing system, providing accurate information is difficult. Accessing invoice information in files and cabinets while working away from the office has resulted in limited information being provided.
A decentralized AP process is vulnerable to fraud. When invoices are being paid from different locations, it creates doorways for fake invoices. The decentralized AP system also makes it challenging to keep up with all payments in real-time. AP automation addresses such issues through automating invoicing to block such doorways that allow internal fraud.
4. Automating invoices reduces errors
Gone are the days when employees had to manually enter their data to ensure they are organized. For any business, large or small, yearning to keep up with the competition, automating invoices has taken their businesses a notch higher.
Your business does not need to worry about the numerous errors attached to manual accounting operations. Vital information is not overlooked, making it easier to identify any fraudulent activities.
With the risk of fraud rising, businesses need to invest in the automation of systems. When it comes to accounting processes, automating invoices can help save your company substantially.