England gets its fair share of late payments coverage, with recent headlines tied to the fallout from Carillion’s collapse. The fact remains that some progress has been made, though the road is a long one.
The latest salvo illustrating strides made in tackling late payments — and the challenges that still remain — comes from Invu, an accounts payable (AP) automation firm. The company released a report earlier this month that states that AP professionals are improving in some ways, and yet in some respects are not adequately protecting their firms from fraud.
Where is improvement needed? The survey spanned 200 financial decision makers in the U.K. Of that tally, 41 percent said processes are too manual, and paper still figures significantly, at least in certain procedures. Nearly a quarter of those surveyed said that purchasing processes need an overhaul, urgently. As many as 16 percent said processes are entirely manual and paper-based.
When it comes to fraud, risk abounds, and 72 percent stated that at least one of their processes, as it stands now, exposes the company to the risk of fraud.
There is plenty of talk about fraud elsewhere as well, notably in Israel. As reported in multiple publications, Sara Netanyahu, the wife of the Israeli prime minister, has been charged with fraud, having allegedly used taxpayer money to pay for meals delivered to the couple’s residence. The deliveries took place between 2010 to 2013 and racked up tens of thousands of dollars in charges — despite the fact that chefs were employed in the residence. The staff was allegedly told by Netanyahu not to disclose the fact that such employees were on the premises.
On a more global stage, small organizations are being hit by occupational fraud. This is one of the broader trends identified in a report by the Association of Certified Fraud Examiners. The biennial findings canvassed fraud across many forms. The report looked at more than 2,600 fraud cases and found that the median loss was $130,000. Firms with fewer than 100 employees saw losses of $200,000, and the report cited a lack of resources to battle such fraud. Lack of controls accounted for 42 percent of fraudulent activity at smaller firms, with a tally of 25 percent at larger firms. Owners committed 29 percent of fraud at smaller firms and 16 percent at larger ones.
To get a sense of how fraud gets done at the micro level, consider one recent case where a former Costco employee in Washington state pleaded guilty to embezzling roughly $290,00 from the firm. Robin Cline, who had worked as an accounts receivable clerk for the firm, had been accused by the Justice Department of wire fraud. The former employee had falsified entries in more than 100 customer accounts to steal from the retail giant and its customers.
Separately, in Pennsylvania, a former owner of a payroll company faces more than two and a half years in prison, having stolen roughly $6 million from more than 200 clients. The accused, William Sullivan, pleaded guilty to charges that his firm, Net Pay Solutions, had committed theft between 2006 and 2011, having made off with $5.7 million from 266 clients before falling into bankruptcy. The fraud was committed through false entries logged in software and where Sullivan had commingled firm funds with his own personal funds.