Uttering the word ‘accounting’ can quickly clear a room or leave you with a diminished audience of muted ears. Despite the presence of payments and invoices in just about any company, accounting processes can often be met with little interest and innovation. Automation and technological change have spruced up finance software and online tools, and yet, standard accounting procedures, such as accounts payable, have remained painfully tedious and manual. With a rise in fraudulent payments — 63% of businesses are experiencing more fraud and losses in 2018 than ever before — accounts payable automation is quickly becoming the only way to deal with the sophistication of the modern day criminal. This is allowing businesses to achieve a whole new level of oversight when they automate payment processes.  Here’s how:

Control of user credentials and access

Controlling, and more importantly knowing, who can request and make payments is the first step in tackling fraud. Accounts payable  automation provides an easy solution to this because each invoice and payment request is instantly routed through pre-established channels for approval. Employee user access is also strictly controlled in most AP automation solutions, by allowing administrators to customise user credentials based on job role or other factors.

According to an AFP report , over one-third of payments fraud have actually been internal, involving hired employees. In manual accounts payable systems, any employee could authorise a payment and it would go undetected. Automating accounts payable, therefore, allows only certain employees access to electronically stored data and these solutions can even set up an internal system of checks and balances.

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On-demand reports and notifications

The Association of Certified Fraud Examiners (ACFE) estimates a median of 16 months  before fraud schemes are detected. Embracing accounts payable automation would eliminate this search as it offers accountability with every payment being recorded in the digital system, instantly creating an audit trail. Not only does this allow transaction details to be found efficiently if a business suspects fraudulent activity, but it may help to deter it completely. Automated fraud detection tools, such as positive pay, can also be set up with accounts payable automation to counter cheque fraud and phishing scams.

Accounts payable automation solutions can often track price changes, track increased invoice volume, identify missing invoices, and through immediate notifications, flag any modifications or unverified activity. Some solutions offer on-demand reports as well as invoice and payment audit trails to give administrators the power to know exactly which actions have been taken on any invoice at any time. Additional notification measures can also enhance security. For example, when vendor information changes, an instant email notification could be sent to the payment administrators.

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Set workflows and processes

Accounts payable processes can produce a mountain of paperwork and approvals. Automating the system can alleviate this volume but also set standardised workflows and best practices. This includes a centralisation of all activity and adhering to a step-by-step measure for passing each phase of approving and making payments.

Manually, payments can easily fall through the cracks, but when automated in the cloud, the entire approval and workflow process can be completed from anywhere. This set workflow may include ensuring billed amounts are correct, that all relevant parties are notified, or approving expenses at appropriate intervals.

Accounts payable can be a frustrating and time-consuming part of accounting for finance professionals. Automating accounts payable gives accountants peace of mind over risk of fraud and also streamlines the entire process, from the purchase decision to invoice approval with electronic payments included in the experience. It is yet another example of how digital transformation can save organisations time and resources, and in this case, help prevent losses from fraud.

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Catherine Dahl  is the CEO of Beanworks, a leading accounts payable automation solution.  A Chartered Professional Accountant (CPA) and Certified Management Accountants (CMA) with more than 25 years of operational accounting and management experience, Catherine maintains a unique perspective into the accounting industry at large. She has used this expert insight to steer Beanworks over the last five years and build a thriving company with a fast-growing, highly motivated staff.