Prevent Occupational Fraud with Document Management

In the world of business, fraud is as significant a problem as ever. According to the Association of Certified Fraud Examiners (ACFE), an astounding 5 percent of all company revenue is lost to occupational fraud on an annual basis. In its 2016 Global Fraud Study, the ACFE found that the median loss to fraud for all cases was $150,000; meanwhile, the average loss per case amounted to $2.7 million. Many businesses turn to electronic document management as a way to improve efficiency and productivity while optimizing ease of access and organization. But what many businesspeople don’t know is that electronic document management can actually help prevent occupational fraud.

A great portion of occupational fraud is actually made possible by the practice of using paper as a business’s main medium of documentation. Paper documents make it easier for people to commit fraud, since paper allows for concealment over long periods of time. Filing cabinets, used by businesses to store most of their paper documents, are extremely difficult and time-consuming to search through. As a result, they do an excellent job of hiding paper-based fraudulence, such as fake invoices. Unlike electronic document management systems, papers and file cabinets have no means of recording audit trails for document activity, making it difficult or even impossible to pick up on alarming patterns.

An automated filing system, by contrast, increases the transparency of accounting practices and other document activities. An electronic document management system (EDMS) can integrate all your invoicing processes into one easily accessible infrastructure, so that you can easily keep track of whether orders, payments, and deliveries are matching up. An EDMS also minimizes the risk of double invoicing—when a business accidentally pays an invoice twice, effectively committing fraud against itself. This can occur when a business withholds action on an invoice for so long that a supplier re-invoices. By making your accounting practices and other documentation more centralized, accessible, and visible, a good EDMS helps you keep track of your invoicing so that you can avoid loss to fraud and human error.

If you’re ready to increase efficiency and prevent occupational fraud by going paperless, contact Biel’s today.