October is Cybersecurity Awareness Month! A perfect reminder that protecting your business from fraud should be a top priority. Today, a single breach can hurt both your finances and your reputation. Building a strong anti-fraud culture is essential. Here are some practical steps to help safeguard your organization and stay one step ahead of threats.

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Strengthen internal controls

A key component in reducing fraud is ensuring that no single individual has control over all aspects of any critical financial transaction. Assign different people to authorize payments, process invoices, and reconcile accounts. This segregation of duties makes it harder for fraudulent activities to go unnoticed. 

• Approval Processes: Implementing multi-level approval processes is vital, particularly for large transactions. Multiple approvals add layers of oversight, reducing the chance of unauthorized payments slipping through. 
• Reconciliation: Regular reconciliation of accounts payable records with the general ledger and bank statements helps detect discrepancies early. This practice ensures that any irregularities are investigated and resolved.

Vendor management

Establish strict procedures for adding new vendors. Verify business credentials and conduct thorough background checks. This due diligence helps ensure that you only do business with legitimate, trustworthy vendors. 

• Master vendor list: Maintain a centralized, up-to-date master vendor list. This list helps prevent unauthorized additions or modifications. A controlled list of approved vendors minimizes the risk of fraudulent entities entering your payment system. 
• Periodic review: Regularly review and audit your vendor list to identify and eliminate duplicate or inactive vendors. Keeping the list clean and current reduces opportunities for fraud.

Invoice processing controls

Use a three-way matching system to ensure that invoices match purchase orders and receive reports before making any payments. This method verifies that the goods or services billed for were actually ordered and received. 

• Duplicate payment detection: Implement systems to detect and prevent duplicate payments. Automated systems can flag potential duplicates, allowing you to address them before payments are made. 
• Electronic invoicing: Encourage vendors to submit invoices electronically. Electronic invoicing reduces the risk of manual errors and improves tracking, making it easier to manage and verify invoices.

Technology and automation

• AP automation software: Utilize accounts payable automation software to streamline processes, enhance accuracy, and reduce manual intervention. Automation helps in processing large volumes of transactions efficiently and accurately, reducing the risk of fraud. 
• Secure systems: Ensure that all accounts payable systems are secure and access is restricted to authorized personnel only. Robust security measures protect against unauthorized access and potential breaches.

Vendor relationships

• Transparent communication: Maintain open and transparent communication with your vendors regarding your company’s payment policies and procedures. Clear communication helps build trust and ensures that vendors understand your processes. 
• Vendor education: Educate your vendors about your company’s anti-fraud measures. Encourage them to report any suspicious requests or activities. A well-informed vendor network acts as an additional layer of defense against fraud.

For more insights and updates on corporate payments, check out:

• Virtual card rebates
• 5 ways to cut business costs
• Accounts payables: Terms you need to know

Learn more about how WEX payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers.