Faster P2P Fraud Detection

How E-Procurement Detects Fraud

The effects of procurement software fraud are widespread and can be devastating for companies. While fraud losses worldwide total $7B, the average organization loses about 5% of their revenue annually. Fraud can be very difficult to detect, but your organization can stay ahead of schemes with these 5 warning signs.

Social Engineering

P2P Fraud

Fraudsters create seemingly real purchase orders, but their authenticity can be discovered in the details. Look for inaccurate web addresses, physical addresses, poor wording or grammar, or unusual order sizes or shipment terms.

Fake Companies

Similar to social engineering, fake companies are set up to act as a shell for the fraudulent party to collect money. Watch out for unfamiliar vendors or a variation on an approved vendor and questionable addresses, like a PO Box or an address that matches an employee address.

Outliers and Anomalies

Oftentimes, fraud is detected by noting one stand out purchase. Sudden increase in purchases to one vendor, a processor working with a vendor generally outside their role, POs for poorly defined services, or sequential purchases can all be signs of fraud.

Order Splitting

Some purchasers may split orders to get around the controls set in place to prevent fraud. Purchases just under the approval threshold, multiple POs created at the same time for the same vendor, splitting up costs into multiple POs all point to order splitting red flags.

Late Purchase Order

Purchase Orders should always be created before delivery of the goods. Any discrepancies in dates being out of order with the invoice or POs amended after the invoice is received should signal potential fraud.

According to the Association of Certified Fraud Examiners, the median detection time for fraud is 16 months. In that time, organizations lose thousands, even millions of dollars. Early detection of fraud is crucial and purchasing software can help. The ACFE also claims that analytics software can help organizations detect P2P fraud 58% faster.

Protect your organization with powerful data analytics like Vroozi Analytics. Learn more with a live demo today. Register here.

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Source: Accounting Today, 5 signs of potential procure-to-pay fraud