5 ways A/P managers can help stop fraud
Your A/P leaders have an important role to play in keeping company cash out of the hands of criminals.
According to the Association of Certified Fraud Examiners’ report “Occupational Fraud 2022: A Report to the Nations,” there’s a lot of cash being lost. The global average loss case amount just from internal fraud is estimated to be more than $1.7 million. More than half (54%) of businesses in the U.S. and Canada that have been victimized haven’t been able to recover anything that was lost.
Ensuring that the A/P team follows solid internal controls that cover every step from entering a vendor into the master file to paying an invoice is a good start, but not the only way to protect the bottom line.
Stamping out fraud
Some steps that can go a long way in reducing fraud risks include:
- Carefully screening potential A/P employees before hiring. According to ResourcefulFinancePro‘s Essential Insights “Keep Them Honest: How Top Companies Prevent, Spot and Stop Internal Fraud,” a little more than half of companies run background checks. Because of the access A/P has to sensitive information and company resources, background checks may be justified because they can reveal whether candidates have a history of dishonesty.
- Training staffers to spot fraud. Red flags A/P should look for include vendor addresses that contain a P.O. box or look like an employee’s home address, a vendor name similar to an employee’s name or initials, a logo that appears fuzzy or photocopied, missing vendor data, invoice amounts with uncommonly round numbers, and checks written to “cash.”
- Setting education or certification goals for A/P staffers. Some of your experienced A/P staffers may not be aware of how vital it is to stay educated about fraud and corruption prevention. One way to change that perception could be to offer incentives for earning a certain number of continuing education units. Because that knowledge can be valuable to other members of the A/P team, it may be a good idea to encourage employees to share key takeaways with their co-workers – perhaps in a presentation. Some examples of A/P certification programs include Certified Accounts Payable Professional (CAPP), Certified Accounts Payable Associate (CAPA) and Accounts Payable Specialist (APS).
- Keeping an eye out for law changes. Bookmarking ResourcefulFinancePro.com on your browser can help keep your team up to date.
- Benchmarking against organizations that excel at fraud prevention. It may be worth reaching out to a counterpart at a company you respect to ask about what security measures they’ve found to be effective and any challenges they’ve encountered. If you run into trouble getting a response, your company’s industry may have a national anti-fraud association that can be an invaluable resource.
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