How AP automation for JD Edwards mitigates fraud and compliance risks

How AP automation for JD Edwards helps mitigate fraud and compliance risks

Guest Post by Canon Information and Imaging Solutions, Inc.

If you don’t have accounts payable automation, or AP automation, and it feels like it is getting harder to manage your finance organization’s fraud and compliance risks, you are not imagining things. The finance department is a target-rich environment for crooks:

  • Collusion
  • Vendor schemes
  • Inventory theft and fraud
  • Computer-based payments fraud
  • Conflict of interest
  • Fraudulent financial reporting

 

All told, 75 percent of global senior executives surveyed by Kroll say their organization has experienced some type of fraud, whether it’s insider fraud or supplier fraud. Each year, corporate America loses the equivalent of 5 percent of its total revenues due to fraud, studies show.

Making matters worse, businesses must contend with an ever-increasing regulatory burden and the risk of financial penalties, loss of business, reputational damage and more. For starters, there are dozens of lists of parties that either a buyer cannot do business with, or that have specific restrictions on how a buyer can do business with them.

Having a state-of-the-art ERP application like JD Edwards isn’t enough to manage these risks. Businesses must rethink the other systems and processes such as accounts payable that feed their ERP.

Regardless of your ERP application, manual and semi-automated accounts payable processes leave finance organizations extremely vulnerable to fraud and compliance issues in several ways:

  • No tracking of document history and approvals
  • No way to ensure that employees adhere to approval policies and separation of duties
  • No chain of custody assurances
  • Audit information that is not readily accessible
  • Poor PCI compliance controls
  • No way to prevent documents from being discarded or destroyed ahead of deadlines

Importantly, organizations that rely on manual and semi-automated accounts payable processes don’t have the real-time visibility into their financial data to tightly control their risks:

  1. Key information is not captured
  2. Data is poorly organized
  3. Information is not timely
  4. Systems are badly integrated
  5. Decision-makers cannot access key variables

 

That’s why 24 percent of all fraud cases are the result of billing schemes that could be prevented or detected by sound vendor master database controls and other reporting and visibility measures, per the Association of Certified Fraud Examiners. And that’s why audits induce feelings of nausea.

Finance executives have had enough. Eighty percent of finance executives tell Accenture that they are “concerned” or “very concerned” about their organization’s compliance and security risks.

For their part, 9 percent of accounts payable leaders identify security and compliance as their top improvement priority, per the Institute of Finance and Management (IOFM).

This is where AP automation comes in.

Combining an AP automation solution with your JDE application enables organizations to mitigate fraud and compliance risks. Here are three ways how:

  1. Intelligent data capture: Automated accounts payable solutions capture information from invoices based on pre-configured business rules and validate the information against data that resides in JDE.
  2. Automated workflow: Automated accounts payable solutions electronically route invoices based on pre-defined business rules, ensuring chain of custody and separation of duties and eliminating the possibility that invoices will fall into the wrong hands. What’s more, automated solutions track all activities within the system, such as who approved an invoice. And standardized processes ensure transparency and compliance.
  3. ERP integration: AP automation solutions seamlessly upload data and images on approved invoices to JD Edwards, providing 360-visibility into a transaction and the supplier. Invoices can be accessed directly from JDE transaction screens by leveraging Café One.  And images and data are securely archived and maintained per your guidelines and cannot be discarded prematurely.

Fifty-five percent of finance organizations are investing in digital solutions to mitigate fraud and compliance risks, Accenture reports. Accounts payable automation should be part of this plan.

The control provided by the combination of your ERP and an automated invoice processing solution, such as the one from Canon Information and Imaging Solutions (CIIS), gives businesses an upper-hand against fraudulent activities. By pairing continued investment in your JD Edwards application and implementing integrated user enablement tools, you empower business users and IT to gain control of financial operations while creating the visibility required by management.

This guest post is brought to you by our partner Canon Information & Imaging Solutions. Interested in learning more? Download the CIIS white paper: “3 Ways Accounts Payable Automation Mitigates Fraud.”

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About Canon Information and Imaging Solutions, Inc.

Canon Information and Imaging Solutions, Inc. (CIIS), a wholly owned subsidiary of Canon U.S.A., Inc., brings together Canon’s world-class imaging technologies and information management expertise to assist organizations in achieving their digital transformation objectives. With a focus on innovation, CIIS’s software development and solutions delivery capabilities scale across several practice areas: Business Process Automation, including Procure-to-Pay and Order-to-Cash automation, Document Solutions, Information Management Services with a focus on content capture, management and collaboration, and Security and Infrastructure Management. With expertise in emerging technologies such as artificial intelligence, machine learning, and big data analytics, CIIS deploys its solutions in partnership with leading technology providers and offers comprehensive consulting and professional services that are trusted by organizations of all sizes. Additional information about the company, its programs and mission can be found at ciis.canon.com.