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Fraud feeds off weak controls

No-one likes to think that their organisation, or their department could be at risk from fraud – yet the fact remains that AP is one of the most vulnerable departments in this area. Quite simply, the people who work there have easy access to all the money leaving the company. So it’s in your interest to learn to detect the tale-tale signs that something suspicious is going on.

Of course the following examples don’t necessarily mean that fraud is actually taking place, but alarm bells should sound if you come across the following:

  • Invoices from various suppliers on similar stationary
  • Suppliers with incorrect VAT numbers
  • Transactions which are out of the ordinary – ie late at night, or where the point of sale in a distant city
  • Excessive voids or credits in the receivables ledger
  • Large number of invoices, especially to a particular supplier, just beneath the approvals threshold
  • Few, or unclear reasons for a particular service
  • Suppliers with PO Box addresses, home addresses or suchlike
  • Erratic employee behaviour – always in early or late
  • Sudden, or unexplained employee departure
  • An increase in duplicate payments
  • Excessive amounts of rounded up, or down invoice amounts
  • Above average payments to a supplier

Fraudsters are opportunists – give them the opportunity and they’ll take it – make things difficult and they won’t become better people, but they will look elsewhere.