AP Control Panel: More automation = better security

Most of a company’s cash passes through the hands of accounts payable. This is a positive thing, in that it provides insight into how the organization is spending its money.

However, there’s a downside — it also makes accounts payable a prime target for fraud and security breaches.

Particularly for departments that handle many invoices each year, manually detecting an irregularity that may be indicative of fraud becomes increasingly difficult. Without the right accounts payable automation, it’s simply impossible to investigate and verify each payment in detail, particularly when that number reaches hundreds of thousands — or even millions — of invoices per year.

Hyland, in collaboration with the Institute of Finance and Management (IOFM), surveyed more than 300 accounts payable professionals to see how much insight and control they have over access to AP functions. Then, we compared this data to their organizations’ level of automation to see whether their software solutions make their processes more secure.

Finally, we asked this question: How much ability do you have to modify, monitor and grant (or restrict) access to accounts payable processes, documents and systems?

Our assumption was that organizations with higher levels of automation would have greater control of their systems through better tracking, reporting and permissions.

What the data shows

This graph illustrates how survey respondents rated control over their data against their levels of automation.

The assumption that more accounts payable automation does a better job of protecting the organization is correct.

Those with significant or moderate automation had complete control of these processes between 60 and 70 percent of the time. Only in very rare cases did they have no control of these factors.

On the other hand, organizations with limited automation reported complete control of AP processes, documents and systems only about half the time, and had no control whatsoever more than twice as often as their counterparts with significant or moderate automation.

The takeaway

While it might seem that it would be easier for fraudsters to slip through fake payments in larger organizations with greater invoice volumes, this is not borne out by the survey data. Rather, it’s smaller organizations with limited automation that open up an organization to fraud, particularly from within. It’s far easier to manipulate manual payment systems than it is to try to work around the security imposed by robust accounts payable automation solutions.

An organization that cannot regulate AP access leaves the door open to fraud or theft. There are many stories of trusted employees in small businesses who stole from their employers for years without being detected. Losses can mount significantly over time and put the business itself at risk.

As the graph shows, even a moderate degree of automation protects the organization far better than having none or very little.

The AP Control Panel is a first-of-its-kind tool to evaluate your AP department’s level of control over operations, cash flow, compliance and security. Are you ready?

The Institute of Finance and Management

The Institute of Finance and Management

The Institute of Finance and Management (IOFM) was founded in 1982 and since then, its mission has been, and continues to be, to align the resources, events, certifications, and networking... read more about: The Institute of Finance and Management