When he worked as an auditor, Francois Henrion CA, co-founder of payments platform Paytron, uncovered a surprising case of internal fraud that perfectly illustrated his belief that fraud is often carried out by unsuspicious employees.
“When you’re doing something dishonest at work, you obviously take steps to make sure that no one finds out,” Henrion says. “Often, when we did discover fraudulent activity, it was by the nicest individuals, by the people who brought cookies to the office!
“Often fraudulent activity was committed by the people who brought cookies to the office!”
“One lady was embezzling funds to donate to a charity. She justified her actions as charitable. But, before she knew it, the crime had become too big for her to get out of and it was inevitable she’d get caught.”
Henrion came across many examples of fraud perpetrated by staff members of the companies he was engaged by, but knows that there were almost certainly plenty more that remained undiscovered.
A company can also fall victim to unlawful acts carried out by external sources such as suppliers, contractors, customers, or cyber hackers. During his career he has seen organisations take big financial hits through a single criminal act.
Here are Henrion’s six relatively simple steps firms can take to reduce their vulnerability and increase chances of detecting an act of fraud.
Minimising the risk
1. Segregate duties – If the same person who does the record keeping also has access to the company money, they will have the ability to conceal misappropriation of funds. Make sure different individuals carry out these functions.
2. Automate manual processes – Without people, there’s no fraud risk. Use a digital tool to automate systems and ensure controls are in place. This also reduces chances of human error.
3. Bring processes onto one platform – If there are a series of separate platforms to handle different types of payment such as international and domestic supplier payments and corporate expenses, they can be hard to monitor. Fragmented controls bring lower visibility. Whittle down your tech stack and transparency will improve.
4. Confirm banking details – The first time you onboard a supplier, confirm their bank details verbally. Then, any time those details change, ring them to confirm that they are correct.
5. Check GST registration – Some fraud is as simple as charging GST when you’re not registered for it. An automated platform can do this as soon as a new supplier is registered.
6. Don’t leave things to the last minute – When payment processing is late, it adds stress and can mean checks are rushed so incorrect figures (whether accidental or deliberate) slip through. A digital system will do everything ahead of time, leaving plenty of time for controls to be honoured.
A fully automated payments platform like Paytron can save a business money by cracking down on fraud whilst also freeing up staff to concentrate on more important tasks that drive revenue and increase efficiencies.
“Simply creating more time means there’s a much better chance of spotting a suspicious transaction,” Henrion says.
Find out more:
Paytron is a global payments platform simplifying and automating the way businesses and accountants manage transactions to give complete visibility on bill processing, approval workflows, account payables, payroll, and expenses all in one place. To find out more or book a free 30-day trial, visit www.paytron.com.