Did you know that fraud costs UK businesses a staggering £144 billion a year? One type of fraud has increased significantly in recent years and that is invoice fraud, which was accountable for 55% of money lost to organisations between December 2021 and February 2022.
Invoice fraud occurs when a fraudster poses as one of your suppliers. They contact you to inform you that their payment details have changed and may often request payment urgently. This cons businesses to parting with, in some cases, thousands of pounds as they incorrectly pay the fraudster’s invoice. Sometimes the fraud may only come to light when the genuine supplier chases payment.
The good news is that the risk of invoice fraud can be lowered by automating your accounts payable function, and the rising availability of AP Automation software is making this an affordable reality for businesses large and small. Manual AP processes make it hard to spot fraudulent invoices until it’s too late, and large volumes of invoices landing in inboxes for approval also makes it harder to identify fraudulent activity too.
We are thrilled to be releasing AP Automation for Opera 3 SQL SE soon. Let’s look at three types of invoice fraud that our AP Automation software will help to prevent:
Duplicate invoices are look-a-like versions of genuine supplier invoices but with different payment details. These can often slip under the radar during a manual approval process as they look exactly like the genuine invoices you would normally receive from your suppliers.
With Opera 3 SQL SE AP Automation, the bank detail verification function detects any invoices with different payment details and prevents it from progressing in the system further until it has been manually investigated. This clever feature extracts the bank details on every invoice and cross-compares them with the bank details saved against your supplier in the system. Any inconsistencies are flagged and frozen for manual intervention.
CEO fraud occurs when a fraudster impersonates the CEO of your company and sends an email to your finance team authorising urgent payment to secure a deal. In busy finance departments, even with the most suspecting of finance personnel, CEO fraud can slip through if caught on a particularly busy day.
Opera 3 SQL SE AP Automation helps you create a culture within your company where all payments need to be approved by multiple approvers so if any payment requests fall out of this routine it raises flags straight away. It also makes it best practice to create a purchase order for payments, even on the occasion where there isn’t one. Our AP Automation software comes with a clever central hub for financial controllers where payments must be authorised by several authorisers (you determine the level of authorisers) so any unauthorised payments or unscheduled payments are spotted immediately.
A shell company is a company set up for fraudulent purposes, they exist only on paper and provide no services. However, the fraudsters behind these companies can produce genuine looking invoices for AP departments to convince them they have provided goods or services to your organisation. Sometimes they even create a shell company with a name very similar to one of your genuine suppliers and attempt to slip these through your AP function.
With Opera 3 SQL SE AP Automation every new supplier needs to be onboarded correctly before an invoice can be processed, which means if a supplier isn’t recognised on the system, no invoices will proceed until they’ve been formally checked and added.
It goes without saying that any AP automation software cannot be relied upon fully to eliminate fraud, but the clever features we have added to our Opera 3 SQL SE AP Automation software mean the risk of fraud is reduced quite substantially. We still advise providing thorough training for your finance personnel, regular audits and vigilant data monitoring, but with those things in addition to our AP Automation software we feel confident your business will be fraud-proof to some of the three biggest types of invoice fraud.
For more information about AP Automation in Opera 3 SQL SE please contact us today.
Posted On: May 11, 2023
