Tips to spot fraudulent accounts payable activity

Author: Brent Meyers
Everyone believes accounts payable fraud is a problem only for other companies. According to Association of Certified Fraud Examiners (ACFE) research, organizations worldwide are losing an estimated 5 percent of their annual revenues to fraud, which translates to more than $3.5 trillion annually. So the best tip to stay away from fraud is learning to catch the red flags.
1. Keep an eye on employees who rarely takes day offs
Dedication to work is good, but takes a closer look at the employee who never calls in sick or who never goes on a vacation. It could be because the employee needs to be on the job to continue rolling his/herfraud scheme.
2. Sudden lifestyle improvement in an employee
Watch out the activities of an employee if there is a sudden lifestyle improvement in his activities, it could be at the expense of your company. It’s truly hard for anyone to let go the opportunity to improve their quality of life. When you are the employer, you should have an inside out knowledge on how much each employee can afford.
3. Suspicious data patterns must be thoroughly checked
It is a cause of concern, if you come across payment duplication, excessive buying of unnecessary items, and a large number of shipments to PO boxes, excessive deliveries on holidays and weekends, preferential payment to a particular vendor and many more. In all these cases payment data must be thoroughly checked.
4. Shift to ACH or electronic payment methods
Electronic payment methods or ACH would be time consuming compared to printing a check. But the time spent is worth for future verification. You get any data in just one click rather than turning pages after pages, if any future verification is required.

Please submit the form

what would you like to do?