News & Resources

New methods of cutting down on payments fraud

Aug 01, 2013 Dave King

Electronic payment fraud continues to damage the finances of thousands of businesses in the United States every year, as hackers have become more skilled at circumventing security protocols. Additionally, while more businesses are now using ACH cards and other electronic payment methods to streamline accounts payable and receivable, too few have implemented any security solutions.

Studies continue to indicate that the vast majority of data breaches and subsequent fraud could have been prevented had simple security solutions and processes been in place, including firewalls and employee training. Businesses using electronic payments systems should adopt both traditional and more progressive security tools to decrease the chances of becoming a victim.

High-tech approach
Shared Services Link recently reported that e-Invoicing is becoming one of the more popular new technologies that has been found to reduce payments fraud in some instances. E-Invoicing is one form of digital billing that enables more fluid oversight of all transactions and financial information exchanges, thus improving accuracy and efficiency.

According to the news provider, duplicate invoices are a relatively common challenge for companies, especially firms that have multiple offices and recurring payments with similar vendors. This issue can range from a simple problem, such as when it is a simple error, to severe when the duplicates are being made with criminal intent to steal funds.

Either way, duplicate invoicing can hurt the efficiency and integrity of accounts payable and transaction processing for any firm. The source explained that e-Invoicing technology helps identify duplicates more quickly than staff members would normally be able to do without any technological support. Reductions in redundancies and anomalies will lead to more streamlined accounts payable and receivable management.

Shared Services Link added that e-Invoicing also helps to solve the problem of phishing and similar crimes, where the thief will set up seemingly legitimate accounts to trick clerks. This issue has become more widespread in recent years, and is one of the simplest crimes to carry out. E-Invoicing works as a support that helps clerks avoid falling for these types of scams.

Finally, the news provider noted that invoice fraud leads to billions of dollars in losses for enterprises each year, and electronic solutions can help reduce the rate of this crime.

Economic impact of financial fraud
Leadership Magazine recently explained that the rising rate of financial fraud has led to hindered economic growth in many countries. Nations from virtually every continent have experienced the sting of fraud, cyber breaches and other crimes, while the economic losses are believed to reach roughly $1 trillion in the U.S. annually.

Enterprises can avoid becoming victims of these crimes by simply enacting the most advanced security protocols for all accounts payable and receivable activity. Data security software, firewalls, network monitoring controls and other technology will help shore up defenses, though nothing is more important than personnel.

All employees should be taught the best practices of secure payment processing, and trusted members of staff should be tasked with reviewing accounts activity.