Accounts payable (AP)  is a crucial function in any organization, as it deals with managing the payment to suppliers and vendors. However, it is also highly susceptible to accounts payable fraud detection and anomalies. According to the Association of Certified Fraud Examiners, organizations lose an estimated 5% of their annual revenue to fraud, with the majority of these cases happening in the AP function. This is where artificial intelligence (AI)-led fraud detection automation can help organizations detect and prevent fraud and anomalies.

Anomalies and Frauds Impacting AP Functions

AP frauds can occur in various guises, ranging from simple errors and mistakes to complex fraudulent activities. Some of the common anomalies and frauds that affect AP functions, include:

1. Duplicate Invoices: Duplicate invoices arise due to human error or intentional fraud. In such cases, the payment for the same invoice is made twice, leading to financial losses for the organization.
2. Phantom Vendors: Phantom vendors are fictitious vendors created by employees or fraudsters to siphon off money from the organization. In such cases, payments are made to these vendors without any goods or services being provided, leading to financial losses for the organization.
3. Business Email Compromise (BEC): BEC is a type of phishing scam where fraudsters send emails pretending to be a legitimate supplier or vendor, asking for payment to be made to a different bank account. In such cases, the payment is made to a fraudulent bank account(s), leading to financial losses for the organization.
4. Anomalies in Buying Patterns: Anomalies in buying patterns can indicate fraudulent activities, such as a sudden increase in purchases from a particular vendor, or purchases made outside of usual business hours.

Read Our Latest Blog- The Ultimate Guide to Accounts Payable Automation

Zycus AI-led Accounts Payable Fraud Detection Solutions

Zycus AI-led AP automation solution is designed to help organizations detect and prevent fraud and anomalies in their AP processes. Some of the key features of the solution, include:

1. Detecting Phantom Vendors: Zycus’ Accounts Payable automation solution uses advanced analytics and machine learning (ML) algorithms to detect phantom vendors. The solution analyzes vendor data to identify any irregularities or anomalies, such as vendors with no physical address or vendors with similar bank account details.
2. Flagging Suspicious Vendor Emails: Zycus’ AP automation solution flags any suspicious vendor emails for bank details change. The solution analyzes the email content and sender details to identify any anomalies or irregularities, such as emails from suspicious email addresses or emails with unusual language.
3. Reducing the Risk of Phishing: Zycus’ AP automation solution reduces the risk of the organization being subjected to fraudulent attempts due to phishing. The solution uses advanced email security features to identify and block phishing emails, ensuring that payments are made only to legitimate vendors.
4. Mitigating Duplicate Invoices: Zycus’ Accounts Payable automation solution flags duplicate invoices based on items being invoiced, ensuring that duplicate payments are mitigated.
5. Detecting Anomaly in Buying Patterns: Zycus’ AP automation solution uses advanced analytics and machine learning (ML) algorithms to detect anomalies in buying patterns. The solution analyzes purchasing data to identify any irregularities or anomalies, such as sudden spikes in purchases from a particular vendor.

Solution- Accounts Payable Automation for Anomaly and Fraud Detection

Key Use cases OF Zycus AI-led AP automation solution:

Zycus AI-led AP automation solution can be used in various scenarios to detect and prevent fraud and anomalies. Here are some of the use cases:

• A hacker gains access to a supplier account and changes the banking details, which if undetected, can lead to payment being made to a wrong account: Zycus’ AP automation Software detects any changes to bank account details and flags any suspicious emails requesting such changes to prevent fraudulent payments.
• The Buyer receives emails from suspicious emails for banking details change which goes undetected and gets paid: Zycus’ AP automation solution identifies suspicious emails and flags them for further investigation, ensuring that payments are only made to legitimate vendors.
• The Supplier sends a non-PO (purchase order) invoice which is a duplicate of an already paid invoice and gets paid again: Zycus’ AP automation solution flags duplicate invoices, ensuring that duplicate payments are avoided.

Read Our blog- Accounts Payable Challenges: How to efficiently process non-PO Invoices?

The Benefits of AI-led Accounts Payable Fraud Detection

Zycus AI-led AP automation solution offers several benefits to AP functions. Here are some of the key benefits:

1. Reducing Financial Losses: Zycus’ Accounts Payable automation solution helps organizations detect & prevent fraud and anomalies, reducing the risk of financial losses owing to fraudulent activities.
2. Identifying Anomalies and Taking Corrective Actions: Zycus’ AP automation solution identifies anomalies in AP processes and takes corrective action, ensuring that an organization’s financial data is accurate and reliable.
3. Time and Effort Savings: Zycus’ AP automation solution automates manual AP processes, saving time and effort for AP specialists and managers, allowing them to focus on higher-value tasks/initiatives.

Read our blog- AP Workflow Automation: From Tedious Tasks to Automation-led Time and Cost Savings

The Four Pillars of Accounts Payable Fraud Detection

Zycus AI-led AP automation solution is built on four pillars of anomaly and fraud detection:

1. Business Email Compromise: This pillar focuses on identifying signature anomalies and suspicious sender emails to detect potential phishing scams.
2. Duplicate Invoice Detection: This pillar focuses on identifying and flagging duplicate invoices to avoid double payments.
3. Requisition Splitting: This pillar focuses on detecting pseudo low-value transactional requisitions raised in quick succession, relative to usual buying patterns, to be flagged as fraud.
4. Phantom Vendor Identification: This pillar focuses on identifying fictitious vendors created to siphon off money from the organization.

AP automation solutions can help organizations detect and prevent fraud and anomalies in their AP processes, reducing the risk of financial losses and ensuring the accuracy and reliability of financial data. Zycus’ AI-led AP automation solution offers advanced features, such as phantom vendor detection, email security, and anomaly detection, which can help organizations safeguard against potential fraudsters and reduce financial losses.

With the four pillars of anomaly and fraud detection, enterprises have access to a robust AI-led AP automation solution offering enterprise-grade security and proactive identification of anomalies and potential frauds. Book a demo with our experts for more product understanding.

Related Read:

1. Driving AP Transformation and Cost efficiency with AI-led Automation- EMEA webinar
2. Blog – How to get started with Accounts Payable Automation
3. How to Increase Accounts Payable productivity Without Increasing Headcount
4. Accounts Payable Automation for Anomaly and Fraud Detection
5. Blog- Six Habits of Highly Effective Accounts Payable Managers
6. White Paper – Moving Procurement to the cloud for resilient and efficient operations
7. White paper – Account Payables Report Card: Survey Findings
8. Solution- Accounts Payable Automation Software
9. Solution- Accounts Payable Automation for Touchless Invoice Processing
10. Solution- Streamline Your AP process with Paperless Accounts Payable Software