Fraud a key oversight in Accounts Payable says new report
"The vault is wide open" – new Finance survey warns organizations to close AP fraud loopholes
A leading provider for the financial supply chain raised a warning, today, that businesses are dangerously open to payment fraud. Accounts Payable (AP), Procure to Pay and Shared Services departments have a long way to go to fully safeguard themselves against major fraud risks, warns APEX Analytix in The Financial Leaders’ Benchmarking Report, which surveyed the Shared Services and Outsourcing Network’s (SSON) Global membership.
The report provides essential insights from AP, P2P and Shared Services, and raises concerns about fraud, largely the result of lack of integration and visibility across teams.
"We have been benchmarking AP organizations for over 20 years and the gap between the highest and lowest performing organizations is getting bigger,” says Phil Beane, SVP, Global Operations, APEX Analytix.
However, the report also highlights an increasing focus on supplier information management initiatives that provide robust, automated governance, risk management and compliance – which is adding value both strategically and operationally.
Some of the highlights include:
- The report reveals a troubling lack of integration and visibility across teams: 54% of AP departments reported that they don't partner closely with internal audit and 82% are not connected to corporate security.
- 51% of businesses don't require a secondary review of high value payments, and 79% of businesses don't cross-check their employee records against their vendor data, to ensure employees are not posing as suppliers.
- When it comes to fraud associated with vendors, the holes are just as large. 65% of businesses don't authenticate vendors against external data sources and only 14% capture verifiable details of a vendor’s beneficial owners and officers.
- Other gaps were revealed by the fact that 11% of businesses review high-risk vendors only once a year - and 15% don't do so at all. More concerning is the revelation that in the average business, more than a third (36%) of payments aren't associated with purchase orders or contracts.