A new payments study should strike fear into treasury and finance professionals and serve as another reminder that the sooner organizations can migrate away from paper checks, the better.
After years of modest declines, payments fraud reached an all-time high last year, according to the 2018 Association for Financial Professionals (AFP) Payments Fraud Survey. An eye-popping 78 percent of all organizations were victims of payments fraud in 2017, the AFP survey found.
Not surprisingly, more fraud is tied to checks than any other payment method. Seventy-four percent of organizations that were victims of payments fraud reported this form of attack, AFP reports.
Conversely, only 30 percent of the organizations that were victims of fraud reported card fraud.
Study Finds Payment Fraud Cost Revenues
Payments fraud attacks collectively cost organizations 0.5 percent of their revenues, AFP finds.
Business email compromise (BEC) played a major role in payments fraud in 2017, with 77 percent of organizations experiencing BEC. Thirty-four percent of BEC scams targeted checks, AFP says. The good news is that 77 percent of organizations have implemented controls to prevent BEC scams.
Extreme vigilance – starting with daily reconciliation, periodic reviews of internal accounts and background checks on creditors – is the table stakes in effectively combating the fraudsters who aim to hijack business-to-business payments. In fact, 71 percent of organizations are planning to implement stronger internal controls to mitigate potential payments fraud, AFP’s research finds.
Electronic Payment Automations Mitigate Risk of Fraud
Organizations also need electronic payment solutions that can spot suspicious payments activity before it results in a financial loss. For instance, electronic payments solutions can identify:
- Irregularities in the invoice number, such as gaps in the numbering order, non-sequential invoice numbers or invoices with the same number
- Invoices with similar dates or dates that are within a predefined number of days
- Invoices with similar or suspiciously high amounts
- Invoices for whole dollar amounts
- Invoices for an amount just below your pre-set threshold for manager review
- High-dollar invoices from a new or previously inactive supplier
- High-dollar invoices from a new supplier
- Invoices that use a P.O. box for a remittance address
- Multiple supplier accounts with the same details
- Invalid supplier contact information
The combination of strong internal controls and the automated review of payments activity will make your organization less susceptible to fraud. ACOM Solutions can help mitigate your organization’s risks with electronic payment solutions.
Interested in learning more? Contact ACOM Solutions today!