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March 9, 2020

How Automating Finance Tasks Can Prevent Fraud

Hilary Smith

Small businesses are at a high risk for fraud. And fraud can really damage the future of a growing business. But, fraud is preventable and automating accounting tasks is one way to stop fraudsters in their tracks.

Note: In March, 2021, Roger officially changed its name to Corpay One. Our features and functionality have not changed. To learn more and understand the change, read more.

Fraud costs small businesses $200,000 a year. This is how automation can help you avoid it.

Accounts payable and individual managers often work in silos.

Departments aren't always aware of the expenses that are coming in and the payments that are going out to particular suppliers.

That's why small and medium-sized businesses are often the target of fraudsters. People who want to defraud businesses of money target businesses without oversight or formal systems in place to combat it.

This is an all too common scenario that results in money and precious time lost.

According the 2018 Global Study on Occupational Fraud and Abuse, published by the Association of Certified Fraud Examiners, small businesses lost almost twice as much per scheme to fraud in 2017, with a median loss of $200,000 for companies with fewer than 100 employees. The data is clear, and the threat to SMBs is real.

Why fraud happens

When invoices, supplier information and payment records are stored in fragmented, separate places, like Slack and different inboxes, it becomes difficult to keep solid records of payments made to any one vendor.

Pair that with the fact that conversations around invoices and payments often happen in person, on the phone or in different online channels (making them virtually untraceable), you get an environment prone to fraud and underhanded behavior.

Types of fraud

External accounts payable fraud is more common than businesses think. There are people out there perfectly willing and able to scam businesses out of their hard-earned money. On average, small businesses lose 5% of revenues every year to payments fraud.

A common way to this type of fraud happens is by pretending to be a C-level executive and email back and forth with accounts payable staff to initiate a fake payment. Fake vendors can submit invoices to businesses and, staff with no knowledge of approved vendors, can initiate payment without any follow-up.

Internal fraud can happen when there are no formal internal processes. For example, an employee could change the payment information for a vendor to be their own information and accept the payment.

Preventing fraud with automation

With an automation tool like Roger and proper automated Workflows put in place, it becomes close to impossible to commit fraud.

Roger comes with a built-in audit trail for vendor and payment records, so you can see every person who makes an adjustment to vendor information or payment details.

You can also set different permissions so only certain employees have edit access in Roger. Roger enables your team to have an unlimited number of users, at no additional charge, so you can ensure every employee has visibility in Roger and the ability to upload expenses. But, they can't edit or alter anything.

Preventing fraud with Roger's accounts payable automation

One of the ways an employee can steal from their employer is by stealing checks intended for vendors. They may even change the address that's meant to go on the check to be an address in a location where they can access it and cash it.

Roger works with a third-party bank to handle all payments. Companies don't need to cut any of their own checks or manage any of their own payment transfers. It's all handled by a secure, external bank.

Preventing fraud with tech-savvy tools

Using outdated methods, or scattered ones like a combination of offline and email communication, can open your business up to security issues.

When payment information is stored in an employee's email or phone, it becomes vulnerable to hackers.

With Roger, all payment information and your banking information is stored securely in a place hackers can't access. Roger comes with two-factor authentication and your data is fully protected with AES-256 encryption and fraud detection built in.

Don't risk the future of your business with slow, risky accounting and accounts payable practices. Book a demo of Corpay One to experience the power of accounting automation firsthand.

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