Most likely your company has been defrauded in one way or another. Fraud comes in so many forms and levels of severity that it can be hard to spot without the correct tools.
Fraud can be systematic or opportunistic, internal or external, intentional and even unintended. The common factor with all successful fraud is that it was allowed to happen due to a combination of bad processes and indifference. Either the processes had been poorly designed, or we as employees did not care to follow them.
Indifference is the biggest enabler of fraud. People slip into indifference when they are overworked, tired, and stressed. For example, if reviewing and approving invoices is technically and semantically complicated, and takes a lot of time, the approvers tend to do it poorly. This also applies to unintentional fraud, where vendors forget to follow the agreed prices and terms, and the approvers do not hold them accountable. But if our company is losing money, does it matter if it was intentional or not?
Using data to reveal fraud
Digital processes prevent all kinds of fraud. When everything is easily accessible, and processes are transparent, the digital audit trails easily reveal fraud. Also, digital processes make the approver’s work easier. On the flip side, going digital can also open new channels for fraudsters to send opportunistic fake invoices. These can be prevented with streamlined processes on how invoices are received, new vendors are processed, or old ones are changed.
Preventing internal fraud
Internal fraud can happen when employees overstate or create fictional expenses. This can also happen in cooperation with a vendor - The employee approves overly big invoices, for example. This is why there should be an onboarding process for new vendors. If anyone in the approval chain would manage to open a vendor record of a company that doesn’t exist, you could approve invoices limitless unless someone outside the approval chain can question the validity of the supposed purchases. You can imagine how hard this would be to spot.
"Fraud monitoring is something that every company can and should do."
Detecting fraud with continuous fraud monitoring
However, fraud monitoring is something that every company can and should do. The key to efficiently spotting anomalies in your invoice data is to look at it from different angles and not just focus on for example big invoices. In fact, it is more likely that the biggest frauds are not noticeable exceptions at all. They are small streams that produce big losses over time.
Dooap fraud monitoring can spot exceptions
With Dooap fraud monitoring reports, you are not looking at only errors and exceptions, but learning about the behavior on all invoices, vendors, and users over time. They are tools for your controller to spot bigger trend changes in the invoice streams, and they help identify any unwanted behavior. An agile finance team needs to have the ability to swiftly process exceptions, as well as make them visible for audit trail purposes.
Dooap Fraud monitoring/detection reports have been available to all our users since August 2022. Their existence alone prevents fraud and protects and promotes fraud awareness in all our user companies. The Dooap BI team is looking forward to developing again new tools in cooperation with our customers.