Payment fraud: Firms 'dangerously open' to scams

Businesses are leaving themselves dangerously open to payment fraud, according to a new report that shows that poor communication between teams is increasing the risk of losses.

Research by Apex Analytix found that 54 per cent of accounts payable departments do not work closely with internal audit and 82 per cent are not connected to corporate security.

Meanwhile, 51 per cent of businesses do not conduct secondary reviews of high-value payments and 79 per cent do not check vendor data against staff records to ensure they are not posing as suppliers.

When it comes to vendor safeguards, nearly two thirds of firms do not check vendor details against external sources and just 14 per cent take verifiable details of their owners and officers.

While 11 per cent of businesses review high-risk vendors every year, 15 per cent do not do this at all.

And, somewhat worryingly for businesses trying to keep track of where exactly their money is going, 36 per cent of all payments are not associated with payment orders or contracts.

“We have been benchmarking AP organisations for over 20 years and the gap between the highest and lowest performing organisations is getting bigger,” said Phil Beane, senior vice president for global operations at Apex Analytix, commenting on the findings.

“Our report offers a comprehensive insight into what the best-in-class performers are doing to address their exposure to risk, as well as how they are optimising cash flow and moving towards becoming a profit center. The worrying revelations are the gaps in some organisations that are leaving the door to the vault wide open.

“The good news is we’re also seeing the world’s best organisations continue to improve with 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.”

For the full report, see the Apex Analytix website.