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Building Payment Controls into Accounts Payable – Keystone Habits for Financial Controllers

financial controller using payment controls

Simple, repeatable, and scalable payment controls can protect your entire company.

This article is part 2 of a 4-part series focused on “Keystone Habits for Financial Controllers.

Among the many responsibilities that financial controllers are juggling, accounts payable is among the most essential to their company’s success. While executing the accounts payable process efficiently is crucial, controllers must also ensure that their company’s financial information is protected and secure at every step.

Instances of payment fraud are on the rise across geographies and industries, even while companies continue to invest in fraud prevention. According to a survey conducted by the Association for Financial Professionals, payment fraud is at an all-time high with 78 percent of respondents reporting that they experienced payment fraud in the previous year.

Legacy accounts payable processes – like the use of checks, paper trails, and email approvals – make organizations vulnerable to ongoing payment fraud, and the chances of them even realizing it are slim. In fact, according to a 2018 study by the Association of Certified Fraud Examiners (ACFE) payment fraud lasts 24 months on average before being detected.

Key Accounts Payable Payment Controls

By implementing payment controls like segregation of duties, dual-factor authentication, and tokenization, organizations limit instances of payment fraud and protect finance organizations from bad actors.

Segregation of Duties

Just like the United States government stays accountable with checks and balances, Segregation of Duties is a control where one person is responsible for queueing up business payments, and another person is responsible for approving those payments before funds are released.

By putting multiple sets of eyes on each transaction, organizations mitigate errors and reduce the propensity for fraud.

Dual-Factor Authentication

Given today’s incredibly weak state of password protectivity, Dual Factor Authentication is a must have.  By requiring employees who approve payments to enter a unique security code each time they release funds, Dual Factor Authentication adds an additional layer of security. This has become essential to maintaining the integrity of any B2B payment protocol.

Tokenization

Tokenization is a payment control that produces a unique credit card number for every vendor payment that you make. That credit card number can only be used once, and only for the amount that you designated for that specific payment.  

In a world that is full of variability, tokenization enables you to drastically mitigate the risk of your company credit card information falling into the wrong hands.

Ensuring Repeatability and Scalability

Implementing payment controls is a must for financial controllers, but they must be strategic in the way they go about this. While the accounts payable process is already painfully manual, failing to think holistically when implementing payment controls can lead to even more of the same types of tedious tasks.  

As long as your accounts payable process depends on manual, paper-based processing, these essential payment controls will be challenging to set up and utilize effectively.

As a result, many businesses are looking to the cloud. Cloud-based AP Automation solutions not only build all of these payment controls (and more) into your accounts payable process, but they can also increase your team’s efficiency by up to 70%.

Are you curious to see what your team looks like with these payment controls in place? Set up a demo with MineralTree.


Scott Siegler
Scott is the editor of MineralTree's Invoice-to-Blog, and also a co-curator of The Proper Payable, a weekly email newsletter covering the best (and worst) in financial strategy.


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