< Back to Thought Leadership

3 Practical Ways to Protect Your Company from Accounts Payable Fraud

Processing accounts payable transactions is one of the most significant activities in a contractor’s operations and is an essential component in managing cash flow and project budgets.

Unfortunately, the accounts payable function is vulnerable to fraud by individuals inside and outside of the company, and it is becoming more common and more costly. Below are a few practical measures management can take to protect and secure your resources from theft.

Segregation of Duties

Segregation of duties is a component of internal control where one person is responsible for initiating payments, and another person is responsible for approving those payments before funds are released or checks are cut. Multiple sets of eyes on each transaction assists in reducing errors and the opportunities for fraud. Having such a system in place is especially important when a demand for immediate or urgent payment is received, as that is a hallmark of a fraudster. Business owners and executives are frequently targeted by scammers, so even payments initiated by these individuals should be subject to segregation of duties.

Vendor Verification

If an established vendor calls or emails with a request to change its bank account and routing information (for ACH payments) or mailing address (check payments), a company representative should not rely on the call or email alone and should contact an appropriate individual at the vendor to verify the information. A similar process should be followed during the initial set-up of a vendor. Segregation of duties should also be followed as part of vendor verification, as the individual responsible for creating or updating vendor files should not be the same person who enters invoices or initiates payments. This prevents the disbursement of funds to a scammer.

Positive Pay

Positive pay is a service provided by financial institutions that matches the check number and dollar amount of each check presented for payment against a listing of checks previously authorized by the company. Checks that do not match the information provided by the company are not paid. This prevents the loss of funds due to counterfeit, forged, or falsified checks.

These are just three examples of ways you can protect your company from accounts payable fraud. If you have questions or would like to discuss specific steps your company can take to assess and strengthen its accounts payable process beyond these, please contact your local Blue & Co. advisor.

Pharmacy Benefit Managers: What is Your Plan Paying For?

Pharmacy Benefit Managers: What is Your Plan Paying For?

The world of pharmacy benefits continues to get more complicated, and that is unfortunately not an accident. Pharmacy benefit managers, also known as PBMs, such as Optum, CVS Health, and Express Scripts, cover more than 80% of the American public’s pharmacy needs. Due to their size and control over the pharmacy industry, they can negotiate […]

Learn More
pharmacy benefits

On-Demand Webinar: Transparency and Control, Demystifying Pharmacy Benefits

The world of pharmacy benefits is not transparent by design — pharmacy benefit managers do not want you to look into where your costs are truly going. Join Blue & Co., LLC on Tuesday, April 13 from noon to 1 p.m. for a webinar where our team of Pharmacy Consultants will explain how pharmacy benefit […]

Learn More
Revenue Improvement

Revenue Improvement Case Study: Outpatient Physical and Occupational Therapy

Blue & Co. reviewed publicly available information on a 120 bed, non-profit, acute-care hospital. The data suggested there was revenue improvement opportunity in their outpatient physical and occupational therapy departments. The department had approximately 27,000 patient visits the previous year. During an assessment, we co-validated a significant set of revenue improvement opportunities: charge capture improvement, […]

Learn More