The AFP reports that the scammers are becoming more sophisticated and to fight B2B payment fraud effectively, CFOs need to view their accounts payable holistically, looking beyond just the payments piece of the process.Thus, experts recommend that CFOs start by defining their accounts payable processes in detail from end to end, outlining potential pathways for fraud at each step. That includes breaking down invoice approvals, invoice coding, payment authorization and payment execution steps.
Once they’ve broken down all of their accounts payable processes, CFOs can implement payment controls within each process. Purchase order matching is a good practice for preventing fraudulent invoices from entering the accounts payable process in the first place.
Moreover, companies can also segregate duties related to accounts payable, and create separate roles for the management and approval of invoices. This is an important control that prevents fraudulent invoices from working their way through the AP pipeline.
They can also implement dual-factor authentication—requiring payees to submit an additional measure of authentication. Tokenization creates one-time use card numbers that can be charged for each specific vendor payment, while preventing fraudsters from abusing access to your payment information.
Furthermore, a company can also set up a positive pay approach, where its bank takes the account number, check number and dollar amount of each of the company’s checks that are presented for payment and matches them against a statement from the company of the checks it has issued. Any check that doesn’t match the company’s statement is flagged, and must be approved by the company before the bank releases payment.
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