Over the years the living cost has sky rocketed and the job market is quite stagnant. In such conditions imagine an individual who has to deal on and off with pressure of incentives, performance and rationalization. These factors serve as recipe for ‘Fraud’. When it comes to organizations, this isn’t much different. Organizations often try to prevent fraud by having the required checks and balances in place. Talking about procurement functions within organizations, poor controls is surely a catalyst for a fraud in making.
Frauds within a procurement function can be very complex and can occur within any stage of a procurement cycle right from identification of need/suppliers to the critical buy stage and post buying managing supplier relationships. The damage from such scenario not only impacts the organization from a monetary perspective, but in today’s digital age it can have serious implication on the brand resulting in loss of trust within the investor, customer & supplier community. Let us briefly have a look into the types of procurement frauds.
There are many types of procurement fraud, which can be committed across the entire source-to-pay core process (Source – Chapter 12, Procurement Fraud. Paul Guile, CIPS)
Establishing Robust Procurement Policies and Procedures is of paramount importance to establish transparency within procurement practices. These however need to be renewed and revised regularly to avoid loopholes that may lead to frauds. Policies and Procedures though will have limited impact unless aided by technology – that helps organizations with the necessary tools to implement the policies and track them over a period of time
Streamlining the buying process with robust approval workflows can be one of the starting points to exercise control over the procurement process. Automating the complete source-to-pay process will offer the required visibility into the entire procurement process. Leveraging technology solutions on the transactional side with eProcurement & eInvoicing solutions would not only drive visibility into the process but also drive compliance which will ensure one is buying from contracted suppliers, matching of invoices with the purchase orders to avoid wrong payments, centralized view into all purchases and spend with suppliers and many more. Deploying strategic sourcing solutions would further help in streamlining the sourcing process to incorporate the necessary transparency.
Watch our latest video to understand how p2p automation can benefit your organization to achieve greater control and compliance –