Chief Financial Officers have always played a strategic part in managing risk, notably regarding “their advisory role and position as a stakeholder; their ability to clarify and facilitate decision-making; and their in-depth knowledge of organizations through financial data analysis". Today being a CFO means you must adopt all of this skill set in order to face new and more deadly forms of fraud, extending beyond the traditional types of fraud such as internal embezzlement from an employee and industrial espionage against your business. Luckily, there are now some very effective and advanced technology tools to support your finance department’s fight against Accounts Payable fraud and fraudsters.
Why CFOs should make managing Accounts Payable fraud risks a priority
Can you believe that companies worldwide lose more than billion due to fraud each year? In fact, according to PricewaterhouseCoopers (PwC)'s 2022 Global Economic Crime and Fraud survey, respondents reported total losses of US$42 billion (equivalent to 35 billion British pounds). And this doesn't include the damage to the overall brand, reputation, and even market share. However, despite this, the report also confirms that only half of the companies surveyed say that they carried out a global risk evaluation regarding fraud over the past two years. And the Institute of Finance and Management (IOFM) reports that only nine percent of accounts payable leaders identify security and compliance as their top improvement priority. These figures are far too low, considering in 2019 alone, almost 56 percent of all U.S. businesses fell victim to cybersecurity attacks or breaches!
So, what kind of things should business leadership consider in order to combat the rising number of fraud schemes?
Create awareness in the company about managing Accounts Payable fraud risks
Above all, CFOs and other finance leaders should make risk management and security against fraud a priority for their business. This means taking the time to communicate their commitment to all internal stakeholders by raising employee awareness and providing training to all departments and every hierarchical level within the business. As a result, everyone in your company knows their role in identifying warning signs and exposing potential Accounts Payable fraud risks.
3 types of advanced technologies that are a must for preventing fraud
In the battle against fraud, technology is a highly effective weapon. In the case of Accounts Payable, technology can be considered as a type of concierge or guard service by acting as a gateway and facilitating the entire invoice process. Simply put, if you aren't already exploring the exact advanced technologies you should be leveraging while creating strategies to protect your Accounts Payable department from fraudulent activities, then you’re leaving the door open for fraud to come in and take control of your business.
However, with a good Accounts Payable plan against fraud, you can take back the power and increase the security of employees, vendors, suppliers, and your business. We recommend you start by familiarizing yourself with the advanced technologies that exist to fill in the gaps and how your company can use them to address its pain points, leaving it open to harmful fraudulent activities.
When you’re looking for these advanced technologies, keep in mind that you want to ensure it provides total traceability of all actions taken regarding documents and each invoice. In addition to increasing traceability, the most advanced tools also integrate algorithms capable of extracting all the data present in those documents or invoices. Helping detect and prevent document fraud or make a payment on a fake vendor invoice or duplicate expense, triggering an alert if abnormal data is detected. These are the top features essential to preventing Accounts Payable fraud from sneaking its way into your company's Accounts Payable department to steal the information from a number of invoices or documents. Luckily for your business, employees, and vendors, you can protect your documents and invoice data by ensuring your invoice processing and payment automation solution offers big data, machine learning, and digitization technologies. Yooz offers a cloud-based AP automation solution that provides all of these technologies to flag down fraud and keep sensitive company data safe and secure.
What are digitization, big data, and machine learning's roles in fraud prevention for your company?
Digitization is the process of converting any type of document and date into a digital format for further processing. Digitization is how a company can go paperless so they no longer need to worry about losing documents with sensitive information that can land in the wrong hands.
Big data handles large amounts of data from invoices and documents, no matter the digital format, to create a structured overview of what’s collected. It does this at high speed and typically in real-time. With big data, you’ll improve visibility throughout the invoice processing and payment workflow to keep up with where an invoice or document from the moment it’s in the system to payment.
Machine learning uses all the data fed to the system through digitization and sorted by big data to automatically learn and improve a business’ processes with little to no human intervention. Since machine learning requires little to no human intervention, there will be a decrease in errors, and the technology can learn to detect if a transaction is fraudulent accurately.
We at Yooz understand how powerful these technologies are and how they individually contribute to your invoice processing and payment workflow. Still, we found that combining these advanced technologies is like having an armor of steel that simultaneously protects your Accounts Payable functions and business. This trio is an excellent addition to leveraging Artificial Intelligence (AI), the mastermind of Accounts Payable automation.
Yooz Leverages AI and other advanced technologies to fight fraud in Accounts Payable
Yooz leverages artificial intelligence (AI), a complex mechanism that serves as the brain of our invoice processing and payment automation solution. It imitates human behavior, executes repetitive manual tasks, and uses reasoning to quickly adapt and learn new information on an invoice or document. As you continue to use Yooz, the AI technology will learn how to process new or recognize duplicate information on an invoice or document with little to no human intervention. That way, your company will reduce the chance of sensitive information getting into the wrong hands. This is similar to how you learn who to share your secrets with after getting to know them over time. Now you may be thinking, “if artificial intelligence does all of that, why does Yooz include big data, digitization, and machine learning in its invoice processing and payment automation solution?”.
Like the brain, AI is composed of multiple parts that come together to support the overall function of your body or, in this case, Yooz’s cutting-edge Accounts Payable automation software. That’s why we added the unique abilities of big data, digitization, and machine learning to make artificial intelligence even more powerful and increase security.
Continuing with the brain analogy, think about the last time you learned something new. Where did you get the information from? Did it come from another person, did you read it online or from a book, and more importantly, did the way the learning method was presented greatly affect your ability to acquire the new skill compared to using an alternative method? Assuming learning styles aren’t a factor, we guess that you could acquire the information regardless of how it was presented. That’s how the digitization process works in the invoice processing and payment workflow. It digests information regardless of the format and what needs to be learned, then turns that data into digital files for processing, removing the need for paper files that could get lost or tampered with. When you learn, your brain takes in the information that processes it by using neurons, so the words you saw on the page have now been broken down and processed by your brain to create a neuron and are safely locked away in your brain.
The big data is the neuron of Accounts Payable automation. It acts as a transmitter for the information it received from digitization, making sure it goes to the right location, no more having to track invoices or documents down because you’ll always know where they’re at or should be. That data or neuron can become a memory in the temporal lobe or machine learning technology. Both can memorize a newly learned skill or behavior in seconds then recall the event months later to provide a starting point on how the brain or AI technologies should behave in a particular situation. However, the brain or AI can override the suggestion by using reasoning and self-correction when they detect something is different from what they’ve previously learned, helping to reduce errors and catch potential fraudulent documentation or invoices that can be costly.
Here are more ways Yooz’s advanced technologies help fight fraud:
Frequency Analysis:- Outstanding amounts versus usage history.
- Recognition of potential duplicate invoices and/or payments.
Robotics: Process Automation (RPA):
- Systemization of internal control rules.
- Identification of fraud attempts.
- History of who accessed documents.
- Automatic alerts in case of changes in vendor bank details.
- Automatic identification of forged documents (invoice, P.O., etc.).
Advanced technologies such as these also support purchase order (P.O.) matching, a critical factor in preventing invoice scamming, a common type of fraud. When a fake supplier submits a fake invoice, if there is no P.O. to match it again, our system will alert the user to temporarily stop the invoice from getting any further in the workflow. Now your employee can double-check the invoice to confirm if it's attempted fraud.
Whether you see advanced technologies as a brain full of knowledge and security or armor of steel, the bottom line is that they’re essential to your business in your fight against fraud. So, commit today, start the conversations within the company, and leverage Yooz’s top-of-the-line invoice processing and payment automation solution leveraging AI and machine learning to win the fight against fraud.
If you are interested in learning more about how Yooz can specifically help your company fight against fraud, you can schedule a discovery call with one of our AP automation experts today!