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5 mins read

Accounts Payable Fraud

Safety in Numbers: Why Every Company Needs a Digital Audit Trail

by Yooz on 09.14.2021

digital audit trail

Everyone knows the feeling of dread when it's time to get receipts in order for the tax return. Matching a particular purchase from months ago with bank or credit card statements, assigning amounts to a particular project or expense category, making sure to not double-book items, perhaps unearthing an unpaid invoice in the process. Having documentation every step of the way helps. A lot. 

 

It's not much different for an accounting department or accounts payable team processing reams of expense reports, vendor invoices, and other documents. Higher volume increases the risk of errors and accounts payable fraud

 

When you're talking about handling hundreds or thousands of expense reports and invoices, not catching the faulty or outright bad ones can have a substantial impact on the company's bottom line. That's why a digital audit trail is so important. 

 

The Ins and Outs of a Digital Audit Trail 

 

It ensures that your AP system logs every interaction with a document with as many details as possible. The goal is twofold - to automatically and immediately flag and catch documents that don't pass muster, and to preserve those logs in the cloud for later checks and audits for specific authorized users. 

 

Once the digital bits of the audit trail, including detailed timestamps, have been securely stored in the cloud, “going to the archive” becomes an instant affair. Searching for a document and tracking its way through the accounting workflow is as easy as performing an internet search in a browser. Taken together, automation ensures that errors and risks such as paying a fraudulent invoice or expense report go down significantly while meeting all compliance requirements.

 

And the potential for damage is significant. When market researcher Ardent Partners polled finance leaders for its “State of ePayables Report 2021,” a record 38% of them said that their business was the target of a payment fraud attack in the past year. 

The pandemic clearly exacerbated the problem of accounts payable fraud. Electronic and digital auditing is becoming increasingly more important.

 

How a Digital Audit Trail Counters Payment fraud

 

Conducting more business outside of the office and working in virtual teams meant more IT and data security risk and more exposure to fraudsters. The report warns that this exposure will not go away anytime soon: “The risk of payment fraud attacks will be part of AP's 'new normal' and… strategies and tools designed to thwart it will become more important.”  

 

Those massive financial hits owed to the pandemic and WFH mandates come on top of the already well-known flaws inherent in expense reports. When the GBTA Foundation and booking platform HRS looked at expense reports back in 2015, they found that almost one in five contained errors, resulting in 18 minutes and 2 in additional staff costs per report to correct those errors in order to meet compliance requirements.

 

Wouldn't it be nice, then, if an audit trail application powered by the latest in machine learning and robotic process automation was smart enough to preemptively check and, where possible, verify or match vendors, account and routing numbers, invoice and PO numbers, amounts and other crucial details to weed out error and fraud?

 

Yooz captures every detail along the digital audit trail

 

The Yooz platform with its latest add-on YoozPay is the best and easiest way to clamp down on errors and fraud plus maintain a detailed digital audit trail before these issues can become a drag on profits. 

 

Companies that intelligently automate their entire purchase-to-pay process see their exception rate drop from one in four to one in ten invoices, and they see instances of outright fraud or duplicate payments go down significantly, as well. What's more, logging every electronic record, relevant click, and keystroke when an invoice or expense report is handled also means a huge drop in staff time spent on looking for documents. 

 

The key to a digital audit trail: smart matching and access control 

 

Here's how Yooz works to keep the AP workflow secure and to detect fraud:

 

  • When an invoice arrives, Yooz captures it regardless of its original format, extracts the relevant data points and securely stores it as an electronic record in the cloud. If the invoice came in on paper, the original can be shredded.

  • The Yooz platform offers two-way and three-way matching for invoices. First, a document is matched to the PO or other documents on file. Once an invoice is matched, a balance check, a tax amount check (if any), and an expense account check are performed. 

  • Only users with login credentials in an organization or company can access documents stored in the cloud. Authorized users are able to see the record history, including who has accessed it, who has approved it, and where it is in the workflow.

  • Permission access can be controlled according to the dollar amount and / or sensitivity of the record, so only approved employees will be able to virtually “touch” the document.

  • Once the record is in the automated system, it becomes part of an efficient and powerful digital invoice workflow. From capture and data extraction through proper routing for approval to finally payment, the goal is to enable straight-through elecrtonic processing that requires little to no human intervention. 

  • In the final step, the transaction and matching document information is exported to and reconciled with the company's financial or ERP system.

 

A digital audit trail secures B2B payments end to end

 

YoozPay, the latest addition to the Yooz platform, puts security and state-of-the-art audit capabilities at the heart of B2B payments, all without compromising user convenience. 

 

Vendors can be paid by providing a single email address and choose to receive funds instantly via virtual credit card. These digital credit cards offer more granular controls and traceability of payments and reduce errors. Accounts payable staff, for their part, can easily onboard suppliers and let Yooz handle the payment process. 

 

YoozPay is designed to meet the high security requirements of enterprise transactions. It has fraud detection built in at every level of the process, including limits and velocity checks as well as pattern checks for additional fraud control.

 

So while it might be easy to submit an incorrect expense report or invoice, with Yooz, these documents will no longer slip through, nor will they tie up valuable staff time or waste company resources.