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Accounts Payable Fraud in 2022

According to PwC’s Global Economic Crime and Fraud Survey 2022, 46% of surveyed organizations experience some form of fraud in the past 24 months.

Organizations are looking for ways to reduce fraud risk. Rillion can help companies reduce fraud by saving time and money, provide a time-stamped audit trail, reduce manual error and missing invoices, and control maverick spending.

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The Accounting Fraud Triangle: Fake Invoices and Fraudulent Schemes

The Accounting Fraud Triangle, a concept developed by Donald Cressy, argues there must be a reason and  motivation behind what drives fraudulent behaviour. The 3 areas it focuses on are Pressure, Opportunity and Rationalization.

An expanded version of the Fraud Triangle was introduced in 2004 by Wolfe and Hermanson, called the Diamond Triangle. The factors in this model are Incentive, Opportunity, Capability and Rationalization. There’s an excellent history and explanation of both of these concepts here.
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Here are some of the key takeaways:
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  • Fraud prevention measures are working: Because there is more awareness of the risk of fraud, organizations are putting in effective policies and procedures to prevent it. Technology plays a big role.
  • 38% of SME’s experienced fraud in the last 24 months: Out of this group, 22% experienced impacts of $1 Million or more.
  • Misconduct risk: Despite all the press about cybercrime, “misconduct risk” is sited 68% in the survey (compared to 29% for cybercrime)
accounting fraud

There are many ways Rillion can help reduce the potential for fraud:

Improved control: Automation provides greater visibility and control over the accounts payable process, enabling companies to track invoices and payments in real-time and detect any unusual activity. This helps identify and prevent fraudulent activity before it occurs.

For example, a case study of a global manufacturer found that automating the accounts payable process resulted in a 50% reduction in the time spent on invoice processing and a 75% reduction in the cost of processing an invoice.

Increased compliance: Automating the accounts payable process can help ensure compliance with regulations and industry standards, which can help reduce the risk of fraud and other illicit activity.

For example, a study of a large US hospital found that automating the accounts payable process resulted in a 50% reduction in the time spent on invoice processing, a 60% reduction in the number of errors, and a 40% reduction in the cost of processing an invoice.

Reduced reliance on paper: Automating the accounts payable process can help reduce the reliance on paper documents, which can be lost, stolen, or altered. This can help reduce the risk of fraudulent activity such as check fraud or invoice fraud.

According to a survey of businesses in the US, those who automated their accounts payable process saw a 70% reduction in the time spent on invoice processing, a 50% reduction in the number of errors, and a 40% reduction in the cost of processing an invoice.

Enhanced security: Automating the accounts payable process can help improve the security of financial data by using electronic data entry and validation, as well as by providing secure access controls and authentication. This reduces the risk of unauthorized access to sensitive financial information, a key factor in preventing fraud.

Automating the accounts payable process with Rillion reduces fraud by improving accuracy, increasing efficiency, and enhancing security and control.

See our whitepaper on preventing fraud in your organization: Top 6 Action Steps to Reduce Payments Fraud

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