FinTech Payments

How Firms Are Reducing AP Losses With Software Automation

August 31, 2020 at 09:35PM

Long before COVID-19 struck, accounts payable (AP) departments faced losses from invoicing errors, external phishing fraud attempts and internal schemes by unscrupulous employees. But as the coronavirus prompted work-from-home arrangements, it created more opportunities for bad actors to take advantage of their companies. 

Despite the strain on workplace budgets caused by the pandemic, experts say businesses are likely to find that investment in AP automation is more important than ever. Not only can it catch simple errors, they say, but automation can help detect fraud, foil would-be thefts and keep funds moving at a time when businesses can’t afford losses.

The most recent issue of CFO’s Guide to Digitizing B2B Payments, a collaboration of PYMNTS and Comdata, a Tennessee-based payment processor, highlights how businesses are updating their AP strategies to detect and thwart fraudsters.

Toni Tornell, controller at United Language Group, the Minneapolis-based language solutions software provider, told PYMNTS that AP automation tools and policies can assist companies’ efforts to prevent crime and human errors from disrupting independent contractor payouts. She said bad actors have put their business email compromise (BEC) schemes into overdrive during the pandemic, seeking to manipulate staff who are adjusting to remote work operations.

“I personally get emails all the time that look like they’re coming from executives, and they’re asking me to process an invoice immediately and they’ll get me details later,” Tornell said. “But I know that’s not our policy. No one will ever say, ‘process this immediately, and I’ll get you the details later.’ The only people who are doing that are fraudsters.”

Researchers at Trend Micro Inc., the Tokyo-based global cybersecurity software company, recently reported that more than 1,000 companies around the world were targeted by such scams, including a phishing scheme directed at Microsoft Corp. executives. 

Neal Anderson, CEO and president of OnPay Solutions, the Florida-based payroll services provider, told PYMNTS that physical checks have remained central to many businesses’ B2B transaction flows during the pandemic, prompting some companies to send AP staff home with check printers. This arrangement, he said, can introduce fraud risks if employees prove untrustworthy and abuse their in-home access to company cash. 

By adopting more AP solutions, he said, firms can be better-equipped to catch honest errors and deliberate fraud. For example, he said, three-way invoice-matching can quickly compare information on invoices, purchase orders and receipts to ensure that all details are coordinated.

Any discrepancy could mean that some of the product has gone missing or that pricing terms have been misapplied. Catching these problems thus prevents AP teams from overpaying.

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