Measures to prevent fraud in the Source-to-Pay process

Fraud prevention in the Source-to-Pay process 

Regardless of the sector in which you operate, fraud can cause financial losses, reputational damage and legal complications. It is therefore essential to implement proactive measure to prevent and detect fraud. Juliette: "Fraud prevention is an important aspect of our Business Spend Management platform and specifically the Source-to-Pay process. You can reduce the risk of fraud considerably by proactively implementing measures aimed at suppliers, such as the identification of risks and the strengthening of internal checks. In addition, continuous education and awareness are of crucial importance in promoting a culture of integrity and compliance. By applying these strategies, organisations can tackle the Source-to-Pay process and minimise the impact of fraud." 

Implementing fraud prevention step by step:

1 | Identify potential risks 

Het begrijpen van de mogelijke risico's en kwetsbaarheden in het Source-to-Pay proces is de eerste stap naar effectieve fraudepreventie. Dit omvat het analyseren van interne processen en workflows, het identificeren van zwakke punten en het implementeren van beveiligingsmaatregelen op verschillende niveaus. Zo kan het voorkomen dat eenzelfde factuur de volgende dag nogmaals door een leverancier wordt verstuurd met een andere datum of factuurnummer. Het is tamelijk belangrijk dat het systeem een controle uitgevoerd op verschillende gegevens van de factuur zoals factuurnummer, factuurbedrag, factuurdatum en leveranciersnummer. Op deze manier is het mogelijk duplicaten vroegtijdig te herkennen. 

2 | Centralise data

Business Spend Management platforms offer centralised storage for data, which improves the control and accessibility of data. This centralisation process minimises errors and inconsistencies in data, thereby improving efficiency and reducing the risk of fraud. It also enables users to analyse data easily, which helps in identifying anomalies and making informed decisions. Juliette explains: "A crucial aspect of fraud prevention is the meticulous validation and verification of supplier data at the earliest possible stage, so during ‘onboarding’ of the supplier. Gathering and checking details, such as the company name, address details, Chamber of Commerce registration, VAT number and bank account number from different sources improves the reliability and accuracy of the data. Important sources in this process are the Chamber of Commerce, Graydon-Creditsafe, or SurePay, for instance. By verifying these details via checks on supplier references and certifications, for example, you can identify and prevent potentially fraudulent activities."  

"You can reduce the risk of fraud considerably by proactively implementing measures aimed at suppliers."

- Juliette Juffermans, Business Analyst | ISPnext

3 | Strengthen internal control mechanisms with the aid of workflows 

"In addition to the use of a Source-to-Pay platform, it is important to strengthen internal control mechanisms. This encompasses the implementation of clear procedures and policy lines for approving suppliers, validating invoices, and carrying out regular audits. By having strong internal controls, you minimise the risk of fraudulent activities." An intelligent Business Spend Management platform offers advanced tools and functionalities that can help with the detection and prevention of fraud. 

4 | Invest in continuous education and awareness in terms of integrity and compliance

"Fraud prevention is the responsibility of the whole organisation, not just the procurement department. Ensure employees are aware of the risks of fraud and understand the appropriate codes of conduct and procedures. Invest in continuous education and awareness programmes to promote a culture of integrity and compliance. That way, fraud can be prevented by, amongst others, setting up the process properly so that procurement contracts are monitored effectively to prevent, for example, the date of the contract being changed from the end of the month to the beginning of the month so that an extra month can be invoiced. '' 

5 | Monitor and analyse data for early detection 

Monitoring and analysing data is essential to detect fraud early, for example, during the supplier's onboarding process. Use third party sources and functionalities to identify suspicious patterns and anomalies. Juliette explains: "By analysing data proactively, you can respond quickly to potentially fraudulent activities. Source-to-Pay platforms offer built-in analysis capabilities by means of which users can gain valuable insights from the data collected. These platforms can also alert you to certificates or contracts that are about to expire, so that early action can be taken. These insights help in taking proactive measures to prevent fraud and reduce risks." 

In short, fraud prevention and fraud detection are an important aspect of the procurement process. We provide a solid basis for a secure and sustainable procurement and supplier management process by means of advanced fraud detection, meticulous validation and verification of data, as well as centralised data management. You immediately benefit from improved efficiency, a lower risk of fraud, and a sustainable supply chain.