Even in the middle of the coronavirus crisis, cybercriminals and fraudsters remained persistent, attacking organizations already reeling from the effects of the pandemic. The level of danger they pose isn’t likely to change in 2021, so it’s high time you invest in solutions that benefit or augment your business data’s security. One such solution is accounts payable (AP) automation.
Discussions on AP automation usually focus either on its ability to enhance productivity or reduce the amount of resources your business uses up, but it can offer much more than these. As a cloud-based solution, it adds several layers of protection to your business data, taking it much further away from data thieves’ grasp.
How does AP automation protect against fraud and data theft?
AP automation’s nature as a paperless solution has much to do with its security-related benefits. In particular, it can:
1. Reduce your dependence on paper checks
Paper checks remain among the most popular modes of payment in business-to-business transactions. But in JPMorgan Chase & Co.’s 2020 report on fraud, 70% of the surveyed businesses admitted to being victims of check-related AP and payment scams. This is because with checks, it’s easy for unauthorized and malicious parties to view and replicate sensitive information such as vendor and bank account details.
AP automation uses electronic files instead of checks and paper documents. These documents are encrypted during transmission from one party to another, and while stored in cloud servers. Encryption ensures that even when files are intercepted by unauthorized parties, they won’t be able to read or use the stolen data.
Furthermore, AP automation easily integrates with electronic payment solutions, allowing you to transmit payments directly to your vendors’ bank accounts. Bank details and transactions are easy to verify, too, reducing the risk of the money landing in the wrong hands.
2. Minimize human input in the AP process
AP automation automates most of the steps in the AP process, reducing the amount of interaction between financial documents and human staff. Besides speeding up the payment process’s completion, automation also offers several benefits security-wise.
For one, it reduces the occurrence of errors that may compromise security. For instance, mistakes during invoice processing may lead to payment details being sent to the wrong recipient. This is avoided when you use AP automation, since every step from data capture and storage to invoice verification and approval is handled by the software.
Moreover, as paper documents are routed from one person to another for verification and approval, they might get lost, damaged, or stolen. This issue was never more evident than during the coronavirus pandemic-related lockdowns, with most businesses forced to operate with their employees working remotely. With AP automation, invoice processing proceeds through an automated workflow and electronic documents can be transmitted securely within seconds over the internet, resolving these issues.
3. Boost overall transparency
Keeping track of payments and payables isn’t so simple in paper-centric processes. If you still use checks, you may need to confirm with your intended recipients if your payment was safely received. On the off chance that your vendor is unavailable for confirmation, it may take some time before you know whether your payment ended up at the right place.
AP automation provides an electronic paper trail that shows you who handles payment processing and where your money and supporting documents are. This much transparency makes it harder for fraudsters to run off with your money or payment information.
4. Improve internal controls
To maximize security, you need to set up internal controls over who accesses invoices and other supporting documents, approves invoices, signs checks, and others. While it’s possible to do this in paper-centric operations, this system will eventually become very challenging as the documents you handle and the vendors you do business with increase.
AP automation solutions let you easily set up and modify internal controls for your AP process as needed. For instance, you can modify permissions so that only specific individuals can access particular data or assign approval to certain individuals. This not only streamlines your operations, but it also mitigates the risk of accidental leaks and other mistakes that compromise your data security.
In 2021, it’s time to let go of risky and dated paper-centric processes. Trust an AP automation solution like PairSoft to help make your business more efficient, secure, and prepared to face the threats and challenges ahead. Learn more when you schedule a free personalized demo today.