Accounts Payable News^®

No-one likes to think that their organisation, or their department could be at risk from fraud – yet the fact remains that AP is one of the most vulnerable departments in this area. Quite simply, the people who work there have easy access to all the money leaving the company. So it’s in your interest to learn to detect the tale-tale signs that something suspicious is going on.

Of course the following examples don’t necessarily mean that fraud is actually taking place, but alarm bells should sound if you come across the following:

• Invoices from various suppliers on similar stationary
• Suppliers with incorrect VAT numbers
• Transactions which are out of the ordinary – ie late at night, or where the point of sale in a distant city
• Excessive voids or credits in the receivables ledger
• Large number of invoices, especially to a particular supplier, just beneath the approvals threshold
• Few, or unclear reasons for a particular service
• Suppliers with PO Box addresses, home addresses or suchlike
• Erratic employee behaviour – always in early or late
• Sudden, or unexplained employee departure
• An increase in duplicate payments
• Excessive amounts of rounded up, or down invoice amounts
• Above average payments to a supplier

Fraud can never be completely eliminated, but there are sensible steps you can take to manage your exposure to the risk of it taking place.  Fraud feeds off organisations where the controls in place are weak. In fact, occupational fraud is a growing problem, and one which the Association of Certified Fraud Examiners estimates accounts for 5% in lost revenue every year. At the very least, even if you simply use automated software to scan for duplicate payments and perform a thorough check of your master vendor file, these two steps alone will significantly decrease the chances of fraudulent activity occurring in your workplace. Like common thieves, fraudsters are opportunists – give them the opportunity and they’ll take it – make things difficult and they won’t become better people, but they will look elsewhere.