Accounts payable automation is an increasingly popular way for businesses large and small to create positive change; its benefits are real, proven and repeatable. Unfortunately, a few persistent myths are holding many companies back from automating AP. In this exclusive BerkOne blog series, we’re investigating one each month; this entry tackles the perception that AP automation isn’t secure.
When our financial information goes digital, there’s an almost knee-jerk concern about security. We take comfort in dealing in tangibles, like handling envelopes and opening filing cabinets. But, although electronic identity theft and data breaches tend to get more airtime, the loopholes created by paper-based systems have persisted for decades. That’s why more and more companies – and AP departments – are ditching the paper trail to blaze a new one in the world of paperless document management.
In a 2008 study sponsored by the Alliance for Secure Business Information (ASBI) and conducted by the Ponemon Institute, 71 percent of participants stated they were aware of an incident in which sensitive or confidential paper documents were lost or misplaced in their organization. In a traditional paper-based AP workflow, between the mail route, the post office, your mailbox and internal approval circuit (and unknown copies that could be circulating elsewhere), there are plenty of opportunities for an invoice to go missing, get duplicated or be seen by unauthorized personnel.
What do you stand to lose if your invoice gets into the wrong hands? Well, if your profit margins rely upon discounted pricing from an under-the-radar supplier, or if you’re a pharma company who just purchased a patent, then the answer might be “a lot.” After all, your invoices are more than numbers on a page: between the lines lies your competitive advantage.
Fortunately, a paperless, automated AP system is designed to enhance document control – and document security – from the time the bill hits your mailbox to when the check is cut.
The beauty of a well-designed paperless document workflow is that even if an invoice begins as paper, it doesn’t stay that way for long.
Many companies, like our BerkOne clients, arrange for invoices to be received at a secure, off-site location. Mail is picked up directly from the post office by a bonded courier in an insured vehicle and delivered for processing. Once the paper invoices have been scanned and header info has been put into the AP system, all invoices are shredded according to a preset records destruction schedule. For invoices received via email, the attachment is handled electronically (versus paper-based systems where electronic invoices are many times printed before being processed on paper). This ensures that all invoicing data exists solely within the controlled paperless AP system environment moving forward.
From the moment an invoice is uploaded into your automated AP system, your digital audit trail begins. It’s no longer plausible for an invoice to get lost or buried – and by utilizing a standard structure and naming convention, it’s virtually impossible for an invoice to go missing. Not only that, as your file travels through your custom approval workflow, user access levels can be managed, including who has permission to view, edit or approve documents. And unlike paper files that can easily be copied or shared with others, an automated AP system will track every action by every user, so you have a complete look at who has “handled” the file and when.
Typically, once an invoice has gone through your company and you’ve written the check, the matter is out of your hands.
But by using an automated AP system and outsourcing the check printing, your check can leave your office with an added layer of security, thanks to what is known as Positive Pay. Based on the AP check file you provide to a qualified outsourced check printer, Positive Pay data is generated during the check printing process and secured in a file that is then uploaded to your bank. As your checks are presented to your bank for payment, the bank compares the Positive Pay data to the check and pays only those checks that match. If any check appears fraudulent, it is flagged and you are contacted. This helps improve the visibility of check activity, reinforces your internal AP controls and ensures your digital audit trail is complete.
So, are you putting your information at risk by moving to paperless AP automation? Quite the opposite. You are replacing the misplaced paperwork and unauthorized payments of old with an AP process that promotes transparency and security, every step of the way.
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