Make your business a fraud-free zone

Even the most trusted and loyal employee can give in to the temptation to steal from the business if the proper controls and measures are not put in place. Carel Spies shares how you can find out how ways to curb fraudulent activities in your accounts department.

The accounts department is the most vulnerable to fraudulent activity. Accounts payable fraud can provide an employee with a way to hide illegitimate transactions among hundreds of legitimate ones.

Carel Spies, a specialist in accounts payable issues, shares some tips on how to prevent fraud in the workplace. There are five basic ways fraud is being committed in the accounts payable department according to Spies:
·         Duplicate supplier invoices are being presented for payment again
·         Photostat copies of supplier invoices are being presented for payment
·         Supplier invoices are being rounded-off to the nearest Rand
·         Fraudulent payments are being submitted for amounts just below the official authorization limits
·         Manual cheques are being written to pay suppliers

Employers are cautioned to monitor employees that work after hours unnecessarily, or when there is an abnormally close friendship between a supplier and the person responsible for the account.

An improved lifestyle overnight can also be an indicator of illegal activity.

Detecting fraud requires a certain level of awareness and understanding of company operations by the employer, particularly in the accounts department.

Other suspicious activities include unallocated or strange entries on the bank statement, over-charging on supplier invoices, change of supplier’s bank account details or a manual cheque presented for payment.

 Spies suggests that regular internal transfer of Accounts Payable staff be performed to ward off fraudulent behavior. “Rotate responsibilities between staff frequently.”

Develop a stringent internal control system of checks and balances. It should include the frequent sign-off of procedures within the invoice processing system.

Another idea is to promote employee vigilance by “creating a reward system for successful detection of fraudulent activities”.

“If fraud has been detected it is best to act quickly to apprehend the fraudster.”

Spies recommends an immediate forensic investigation which includes interviewing possible witnesses or alleged offenders without putting suspected blame on them.

“Announce preventative measures to the public and change procedures or system to improve internal controls.”

“If employees start complaining about the security checks – that means the potential fraudsters’ comfort zone is being penetrated by security checks.”

The Accounts Payable Processes & Best Practices training course is held by Alusani Skills & Training Network®. For more information call 011 447 7470 email [email protected] or visit the website Alusani Skills & Training Network


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