Fraudulent supplier invoices hit the press again
Accounts payable automation. AP automation. Purchase invoice automation. Supplier invoice management. They’re all basically the same thing and it’s not hard to do. Yet once more we have the issue hit the press in Sydney. Fake invoices were sent to a number of mining companies and were actually paid. I note in the article that very few of the affected companies were willing to be involved in the prosecution because “it raises questions of corporate governance”. And so it should.
There are two approaches to spend management. The full cycle option involves requisition approval, controlled purchase order generation, separated goods receipt and, of course, supplier invoice matching and approval. That is the proper way to do it. Control the money you spend before you spend it. For many it can be a big project with change management challenges across the business, but it definitely delivers the best financial control, budget management and compliance outcomes. (For some proof on that refer our 2013 iPOS for SunSystems eProcurement research findings.) No fake invoices should slip through this process. Properly implemented solutions allow companies to effectively reject supplier invoices that arrive without a purchase order reference (utilities and such categories likely excluded). No PO ref, no payment. Simple as that. An invoice with a correct PO reference can be automatically matched to original order and the goods receipted to date, partially approved, partially paid, hold the items still awaiting receipting, etc. All nice clean auditable processes. Have a look at iPOS for SunSystems and Workplace eProcurement for MS Dynamics to see two of these solutions in action.
An alternative approach is to only manage the supplier invoice itself. This fails the full cycle control test but it should adequately protect you against the fraudulent biller, or indeed the careless biller, who sends you the same invoice twice. At its most basic you need to record the supplier company, their invoice number, total amount, expense allocation and other details into a register and then pass it through some form of review and delegation control that requires multiple approvals before payment can be made. Smart workflow should include validation checks that bring some rigour to the process. Is the invoicing company on the supplier register (cross reference the ABN)? If they don’t exist why are you getting an invoice – that’s the first question. They might be legitimate but you need to trap and manage that before you pay up. Has this invoice number been already loaded from this supplier? Perhaps you should allocate the invoice items to expense accounts that then drive the delegated approval matrix. Consider XMPro to address spend control through this approach.
You can read more about Professional Advantage and iPOS or XMPro here.
[cd-form type=”contact-2columns” title=”Need an answer?” action=”http://analytics.clickdimensions.com/forms/h/aQFTAdPgQOEOW6iXUblDtg” button=”Make an enquiry” thankyou=”Thank you for your enquiry. We’ll be in touch shortly.”]