Four Ways Automated Invoice Processing Can Reduce Payment Fraud

CalendarAugust 24, 2023

Four Ways Automated Invoice Processing Can Reduce Payment Fraud

Payment fraud continues to be a major concern across industries, with estimated losses due to fraud reaching a staggering $47B in 2023. To reduce payment fraud risk, businesses can implement automated invoice processing to effectively safeguard their organization against financial losses and preserve their valuable reputation.

What Does Payment Fraud Mean for AP?

Payment fraud involves the unauthorized or deceptive use of payment methods to steal money from companies and their employees. Payment fraud can take the form of identity theft, phishing scams, counterfeit invoices, or manipulated payment details. 

Invoice-related fraud is a common threat that can have detrimental effects on businesses. This type of fraud takes advantage of vulnerabilities present in manual invoice processes, which can be mitigated by implementing automated invoice processing systems.

How Automated Invoice Processing Reduces Fraud

Automated invoice processing uses advanced technologies to eliminate manual data entry, reduce human error, and enable accurate invoice processing. While the benefits of automated invoice processing are numerous, we’ll focus strictly on the risk reduction benefits the solution offers.

1. Validate Invoices and Data in Real Time

Automated systems can validate invoices in real time, ensuring that invoices are from legitimate sources. By utilizing a system like Corpay, users can effortlessly cross-reference vendor information like bank account details and tax ID numbers, effectively authenticating invoices. Immediate identification of discrepancies reduces the likelihood of these issues progressing further in the process.

The same approach applies to matching incoming invoices with corresponding purchase orders and delivery receipts. While some businesses do this manually, automated software can quickly compare these documents and flag inconsistencies for review. This not only enhances protection against fraud, but reduces time spent on administrative tasks. 

Eliminate the time-consuming process of manual invoice validation and identify inconsistencies before they become headaches.

2. Centralize Vendor Data

Automated invoice processing systems like Corpay maintain a centralized vendor database, which stores relevant information such as contact details, tax identification numbers, and banking information. In a manual process, users must collect, verify, and update this information on a regular basis to avoid discrepancies.

An automated system collects and verifies this data without the need for manual intervention. Regularly verifying and validating vendor data against trusted sources helps identify potential fraud before initiating payments.

Keep vendor databases up to date and check invoices against current and accurate vendor data without the need for manual intervention.

3. Integrate With Fraud Detection Tools

One of the significant advantages of an automated invoice system is its integration with fraud detection tools. These tools and algorithms analyze patterns and identify potential fraudulent activities. 

This integration allows the system to flag invoices with unusual payment amounts, unrecognized vendors, or abnormal payment patterns. The business can then investigate the issue, prevent any fraudulent payments from going through, and establish a defensive strategy for next time.

Take advantage of the latest fraud detection tools directly within your invoicing system and only intervene when the system flags an irregularity.

4. Audit, Monitor, and Report in Real Time

Selecting an automated invoice system that includes a comprehensive audit feature will not only keep your records up to date, but will help catch and reduce fraudulent payments as well. Logs can include information including user actions, approval timestamps, and system-generated events. These details are needed for forensic analysis in cases of suspected fraud. 

With the availability of these logs, companies can identify fraud and implement corrective actions for the present, as well as protective actions for the future. Invoice systems are also monitored in real time, continuously analyzing invoice and payment requests. With proactive monitoring happening in the background, the identification of suspicious activities becomes something companies only have to address when they pose a potential threat. 

Instead of utilizing resources to analyze every invoice, payment, and potential issue, focus only on actual threats to efficiently protect the company. 

Combat the Growing Threat of Payment Fraud Today

Payment fraud continues to be a growing threat that looms over any business that has an AP department. Instead of using cumbersome manual processes that may expose your business to additional risk, look to modern solutions instead. AP automation from companies like Corpay can protect in-network payments and mitigate fraud risk with a comprehensive security and compliance infrastructure. 

Looking for a way to start combatting payment fraud risk? Contact our in-house experts at Corpay today to discuss your specific fraud challenges.