THE Association of Certified Fraud Examiners, the world's largest anti-fraud organisation, claim that small and mid-sized businesses are the most common victims of insider fraud. Equally the effects of an individual’s activity can be more damaging in a smaller organisation, not just due to the financial loss, but the management time dealing with the incident too.

Cloud Accounting can provide effective tools to help mitigate the risk of fraud whilst also introducing enhanced efficiencies into the financial processes.

Historically processing purchase invoices is susceptible to fraud because it is an area that often uses paper-based systems and relies on the correct physical input of data.

Cloud accounting, artificial intelligence and automation are now changing the way invoices are processed and the way that supplier payments are made. Using cloud accounting apps for data extraction and approvals, such as Receipt Bank and Approval Max alongside your cloud accounting platform, such a Xero or QBO considerably reduce the risks of invoice fraud.

Extraction software utilises Optical Character Recognition technology to read the information contained on submitted purchase invoices, this can be via an email attachment, a scanned invoice or even a photograph of the document. This creates the transaction that is recorded in the accounting platform, rather than manually entering the purchase invoice information. It even stores an image of the original document within the transaction too.

Integrated invoice approval systems such as Approval Max allow budget holders to place purchase orders against their budget and approve spends once invoiced. Typically, fraudsters (internal and external) rely on manual processes and knowing that smaller invoices are less likely to get checked, this automation and traceability in approval vastly reduces the chances of invoices “slipping through the net”. Of course, there are also the clear business benefits around the management of costs and budgets.

Garbutt + Elliott are Platinum Xero Accredited advisors and Gold QBO advisors, our Cloud Solutions Architects work with clients to design, implement and train on the right cloud based solutions.