Insights from Gerry Anderson, CPA Logicon Solutions
To avoid payment fraud and stay ahead of fraudsters, you must be sure to implement these four solutions in your organization:
1.Strong process management: Make sure that one person at your organization is not in charge of the entire end-to-end process. For example, have separate people in charge of vendor setup, invoice entry and vendor payment. Even better, have two people authorize payments and double check invoices to make sure everything looks in order. This will ensure that your employees are on top of any suspicious charges as there will be multiple pairs of eyes at every milestone looking over all procedures. Additionally, paperless systems, positive pay, electronic invoicing, are all paperless methodologies built into your ERP system to help with process management.
2.Preventative controls: Make sure your organization never pre-signs cheques. A much safer way is to arrange for alternative payments. Never have cheques out in the open and never have more than what you need. Another preventative method is to implement strong document security by only allowing senior managers to make orders from a trusted printing company who has all the security features including watermarks, micro-printing and chemical-reactive paper. Finally, make sure your printing device forbids anyone from copying confidential documents by implementing security measures such as thumbprints to find out whether that user is permitted to print these files.
3.Risk management: Manage risk at your organization by ultimately changing the culture within your business. Encourage your employees to become situationally aware and clarify the severity of fraud to the organizations. Use risk models and provide transparency and honesty when communicating this risk information.
4.Education and training: By training and educating your employees, you help all team members understand risk management process. Some examples of good training protocols would be educating team members who handle cheques to recognize altered documents or training on how vendor and cheque fraud occurs.
Take aways
Fraudulent incidents have been happening more often than ever. It is crucial to have a framework to understand these risks and to have strong process management and a robust understanding of the importance of controls. To avoid fraud altogether at your organization, implement these proactive strategies and protect your business!
