Cutting fraud losses through automation technology

Fraud is a significant issue for UK businesses and individuals.

Many studies have reported an increase in scams and fraud in the past few years, with criminals aiming to take advantage of weaker security and uncertainty associated with enforced remote working during the pandemic and higher amounts of online activity.  

According to Action Fraud, one in five small businesses in the UK have been defrauded by an employee at some point.  These instances can cause significant damage given internal staff’s access to sensitive information.

The cost of fraud

One of the most common forms of business fraud is payment diversion fraud, also known as business email compromise. This is when a criminal impersonates a client through mimicking email addresses and invoices to get a company to pay money.

The National Crime Agency found that, across 4,600 such cases in the nine months to the end of September 2021, the average amount lost was £30,000.  Businesses are often targeted around the end of the financial year.

More broadly, another study has shown that organisations can lose as much as 5% of their annual revenue to fraud of all kinds,  including expenses scams, forged invoices, and hidden charges.

This financial cost is something companies will be keen to address with other bills rising and a weak economic outlook. With the UK government exploring whether companies should be held liable for employee fraud,  this cost could rise further.

There is also a potential reputational impact of scams and fraud. Losing money to criminals can undermine customers’ and vendors’ confidence in your company – however unfair this may be – with the additional financial implications this can have.

If, like a surprisingly high number of companies, your firm still uses manual processes in accounting departments, this can make identifying and mitigating these incidents harder.

This is where automation helps.  Using cutting-edge technology can identify potential fraud and reduce the impact of criminal activity on your company’s balance sheet before it hits.

How automation can help

Investing in an automation solution for your accounts department can drastically reduce instances of fraud.  By eliminating repetitive manual processes, you can reduce the number of opportunities for criminals to exploit weaknesses and make your systems more robust and resilient.

Cutting-edge technology can provide accounts and finance departments full transparency of the life of any invoice, from the moment it hits an inbox or mailroom to when the money reaches the intended bank account.

Quadient’s software allows your team to create bespoke approval workflows that send reminders to the relevant staff to ensure invoices are processed promptly.  With a clear audit trail, the risk of fraud is lowered substantially.  With automatically managed approval processes, you can separate duties to lower the risk of internal fraud. 

Machine learning technology can be ‘trained’ to recognise legitimate invoices and flag those that have issues by, for example, comparing a new invoice to previous invoices from the same vendor to check for discrepancies.  This helps identify potential fraud attempts early on before they can cause any damage.
In combination, these elements reduce the time and money that your company spends on invoice processing and other tasks of the accounts payable department – ultimately allowing your team to focus on more productive, profitable work.

Contact us today to learn more about how our technology can improve your accounts department’s resilience.