How technology helps quickly find fraud, waste, and errors
As organisations look to long-term recovery from COVID-19, adequate working capital is critical. So how can you find fraud, waste, and errors, especially when vendors, contractors, and employees are under increased economic pressure?
While the road to recovery from the pandemic might be long, the need for cost savings is immediate. And whether you’re in the private or public sector, there’s no doubt your organisation is losing some amount of revenue to fraud, waste, and errors.
The Association of Certified Fraud Examiners (ACFE) estimates that organisations around the world lose 5% of revenue to fraud. In 2019 alone, the US government made more than $175 billion of improper payments (e.g. sending an incorrect amount or giving money to the wrong person).
So how much might your organisation be losing? We want you to be able to answer that question – and, of course, to prevent losses like these in the first place. That’s why we used our 30+ years of experience working with the Big 4 accounting firms and 6,000 audit and finance departments worldwide to develop our Cost Control Quick Start bundle.
Powered by the machine learning capabilities of ACL Robotics, Cost Control Quick Start combines 18 quick-ROI analytics to help organisations find fraud, waste, and errors – and stop financial leakage fast. But before we get into the benefits, let’s look at two myths that keep organisations in the dark.
1. Our ERP system is enough
ERP controls work great when your processes and data are perfect. (Hint: They’re never perfect.) When your AP team gets handed an invoice that’s due in two days because it’s been sitting on a manager’s desk for a month, or when some data integration has duplicated vendor records, you know that errors and mistakes occur very frequently.
2. Our cost-recovery service handles it
Third-party cost-recovery services are incentivised to find fraud, waste, and errors; but not to help you fix anything. Their business model depends on finding your errors and fraud and keeping a portion of the proceeds – not on driving your process improvements. And, when you hand over your data to a cost-recovery vendor, do you know how secure they actually are?
Now that we’ve covered a couple of myths, let’s move on to some facts: we’ve helped hundreds of organisations recover revenue lost to internal and external parties.
Real-world examples of money found fast
Before we get into the product benefits, here are five non-identifying customers who have quickly detected revenue leakage, fraud, and errors with Galvanize software:
- A global farm equipment manufacturer found $3.6 million in fraud instantly. Over many years, a maintenance manager received vendor kickbacks for creating fake invoices. These invoices were found based on an anomalous flag by Benford’s law: there was an unusual spike of invoices in the data starting with the digits “47.”
- A university used our solution to help uncover an IT asset hardware misappropriation scheme worth over $350,000. As the programme expanded, over $100,000 worth of duplicate invoices and $200,000 of savings in grants compliance oversight was found.
- An $18-billion materials manufacturer looked at suspicious AP payments and invoices. By comparing hundreds of high-risk keywords against their data, they found an employee was submitting invoices for their child’s Harvard tuition. Another employee had been granting contracts to a business they owned.
- By using the outlier detection capabilities in ACL Robotics, a healthcare customer found it was being charged three times the average rate for medical supplies. Nobody had noticed the discrepancy, because the vendor changed the number of units that shipped per box; something the ERP system didn’t flag.
- A business services company, whose chief audit executive (CAE) was constantly traveling “on business” to cities where there were no offices, found money fast – on investigation, they discovered this football-loving CAE was going to sporting events.
If you want to hear more details about real-world examples of the Cost Control Quick Start bundle in action, listen to Episode 3 of our Office Hours podcast.
The benefits of our Cost Control Quick Start bundle
We’ve already established that you’ll see a quick ROI by finding money fast. Below are five more advantages.
1. Expert support
Our team will help you share your data to our secure cloud environment, and then apply it against our suite of 18 analytics. You can start immediately investigating red flags and find money—no significant IT support or data scientists needed.
2. More recovering, less wondering
You’ll be able to easily monitor 100% of your transactions, so you can stop erroneous and improper payments from going out the door, and recover money faster.
3. Data, data, and more data
From residential and business addresses, to US government spending and Census data, you’ll have access to plenty of existing ACL Robotics scripts.
4. A versatile toolkit
Think of your bundle as a launching-point for a complete spend and controls monitoring programme. You can apply these tools to analysing revenue leakage, tax compliance, benefits reconciliations, or inappropriate purchase card expenses, for example.
5. Easy-to-understand results
Your team receives transparent reports directly so you can instantly demonstrate ROI to stakeholders and the board. It’s easy to tweak, tailor, and take ownership of your analytics programme.
As organisations move beyond COVID-19 crisis management and into recovery mode, cost reduction efforts are going to be front and centre. Instead of having to potentially lay off staff or freeze hiring, slash marketing budgets, or cut employee programmes, wouldn’t it be nice to find money that’s rightfully yours?