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How Can Businesses Fight the War on Invoice Fraud?

April 23, 2012 | Comments: 0 | Views: 78

Recently there has been a great deal of discussion surrounding invoice fraud and how much money it is costing tax payers. According to a new report by the Cabinet Office (Eliminating Public Sector Fraud), the public sector lost £2.3 billion last year to fraudulent purchasing activity, with multiple invoicing being the main offender. Research shows that companies pay 23% of duplicate invoices, 26% pay the wrong supplier and 10% pay for goods that haven't even been received. By eliminating manual data entry and investing in an Invoice Management Solution (IMS) or E-Invoicing system, businesses could prevent the majority of the above discrepancies, whilst also benefitting from reduced costs and improved efficiency.

So what can businesses do to fight the war on invoice fraud? While there are no guaranteed mechanisms to prevent fraud, investing in an invoice processing solution should be one of the first steps companies take. This type of software provides many controls that simply do not exist with a manual process. For example with an invoice management system as part of your wider invoice processing solution, you can enhance security so access can be granted on different levels; only people with the right level of security can gain access. Setting up approval rules in an invoice management system can also help to catch or halt non-compliant purchases, thus improving your chances of spotting fraudulent activity. Invoice management solutions are specialised document management systems developed specifically to manage invoices and their corresponding documents within the finance department. The introduction of systems such as invoice management solutions, could narrow the opportunity for fraud, whilst also providing benefits such as increased visibility, cost savings, process improvements, reduction in process time and increased accuracy.

E-Invoicing is becoming increasingly popular within the procurement world; recently a new report, E-Invoicing/E-Billing: Opportunities in a Challenging Market Environment, stated that 15 billion e-invoices will be will be processed in 2012, with 4.5 billion of that total coming from Europe. As stated before, there is no fail-safe method, but processing invoices electronically will cut down the risk of fraud, error and other inconsistencies. Implementing an e-invoicing system could help the accounts payable department to maintain control over which suppliers are allowed to submit invoices to them, control the vendor number assigned to each authorised supplier, which will prevent the supplier's invoices being submitted from any other source. Purchase order (PO) invoice validation will also confirm that PO-related invoices are submitted by the appropriate supplier.

Every organisation should implement necessary precautions to prevent against fraudulent activity. Having the right systems in place, such as e-invoicing and invoice management systems, will help companies to gain more control over who authorises, sends and receives invoices. In the long run this should help to cut down on fraudulent activities and discrepancies.

A business cannot stop someone from trying or wanting to commit fraud or defraud a company, but what can be done is to put systems in place, like the ones discussed above, to help you stay in control and to improve security. Whether you receive paper or electronic invoices, always be vigilant to make sure your business doesn't become another government statistic.

Documation is a leading provider of document-centric workflow and content management software. It delivers services and solutions to UK, European and global companies. By removing paper and manual processing from business operations, Documation help clients to reduce their costs, improve efficiency, maintain business control and maintain legal compliance.

The software platform on which all Documation solutions are built is called Enable. Enable is a powerful, modular solution designed specifically to automate document intensive business processes. It is highly flexible and has multiple applications ranging from simple archiving through to powerful web-enabled workflow. Such flexibility makes it possible for Documation clients to improve their efficiency and improve customer service, whilst at the same time reducing operational costs.

As Documation develops and writes all its own software, we retain a high level of adaptability and agility. When coupled with the highest levels of service and customer support, we are highly responsive in our ability to meet our customer needs.

Source: EzineArticles
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