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Payment Security 101
Learn about payment fraud and how to prevent it
From invoice processing to handling supplier relations, Accounts Payable (AP) is one of those functions that all organisations need. But, in most cases, the AP department is a cost centre – it doesn’t contribute to an organisation’s bottom line.
Especially during economic downturns, it makes financial sense to run cost centres as efficiently as possible. The costs of an AP department can be high, and relying on cost-cutting alone could undermine your security and put your organisation at risk.
Let’s dive into the costs associated with running an AP department – and how you can drive efficiencies that don’t compromise security.
The average salary of an Accounts Payable officer in Australia can vary widely depending on their seniority and level of experience.
Statistics show that an entry-level AP officer can earn as little as $50,000 per annum. However, salaries rise quickly once the AP officer has a few years’ experience under their belt. Senior AP managers can earn up to $105,000 per annum.
Average AP salaries
Salaries are also expected to increase over coming years as demand for AP staff rises.
According to labour market insights from the Australian Government, demand for AP officers is expected to rise 4.3% to 130,500 full-time employees by 2026.
The costs associated with hiring additional AP staff on higher salaries will have a significant impact across all sectors of the economy. But there will be even bigger impacts to sectors that are the biggest employers of AP staff, including:
57.2% of AP staff are employed across all other sectors of the Australian economy combined.
When you also factor in increased superannuation rates – which are due to rise a further 0.5% each year until they reach 12% in 2025 – every CFO needs to carefully consider just how much you can afford to allocate to AP operations.
Of course, salaries are just one component of running an AP department. There are lots of other costs associated with processing invoices.
It’s worth noting that costs can escalate significantly due to simple human error. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) estimated that about 1.2 billion invoices are exchanged in Australia every year – approximately 20% are sent to the wrong person. Even more concerning is that there’s incorrect information in about 30% of invoices.
These errors can cause delays in payments and, in turn, cashflow. They also require extensive communications between AP officers and suppliers to rectify any invoicing errors. This eats up valuable time for AP officers – and we know from our first section that officers’ time is going to keep costing you more over the next few years.
Most concerningly, invoice errors can result in payments being sent to an incorrect beneficiary. Often, funds sent to an incorrect bank account are impossible to retrieve. Even if they are retrieved, it usually takes weeks or months.
According to Mark Stockwell from the Australian Taxation Office (ATO), the average paper or emailed PDF invoice costs between $27 and $30 to process. For an organisation that’s processing hundreds or thousands of invoices annually, your AP function may end up being an even bigger cost centre than you initially expected.
With all the costs of running an AP department, many organisations try to cut back and save money. This is a risky move because there’s a thin line between cutting costs and cutting corners. Cutting the wrong costs – or cutting too many – can open you to greater risk, which might end up costing far more in the long run.
One critical yet time-consuming activity that AP officers undertake is the supplier “call back.” It’s best practice for an AP officer to call every supplier before processing an invoice. This ensures the business sends funds to the correct BSB and Account Number. Learn what it takes to do implement call-back controls correctly.
Unfortunately, cyber-criminals are actively looking for opportunities to manipulate bank account information in supplier invoices. This type of AP fraud sees unsuspecting employees send funds to bank accounts controlled by scammers. Once the funds are sent to the wrong account, the criminals quickly transfer the money to a foreign bank or buy cryptocurrency, making it all but impossible to recover the funds.
It can be tempting to try and cut down on time-consuming AP processes like call-backs, or to ask staff to take on more of these manual processes within shorter time periods. But that could be inviting a greater risk of human error or – worse – opening your organisation to cyber-threats like BEC attacks.
The key for any CFO is to find ways to drive efficiencies in your AP department without compromising your organisation’s security or reputation.
Leaders don’t need to choose between security and efficiency – technology, automation and the right partners can help you run a cost-efficient yet secure AP team.
In almost any function, the key to efficiency is identifying which processes can be safely automated. The right automation can reduce your risk of human error, cut the amount of time employees spend on manual tasks and defend against scams and cyber-threats.
For instance, Eftsure’s solution sits on top of your accounting processes and helps ensure that incorrect payments become a thing of the past. Every outgoing bank transfer is cross-matched in real time against a proprietary database of Australian bank account data. The system automatically flags bank transfers that don’t align with the information in the Eftsure database, helping you verify payment details quickly and at scale.
At the same time, maintaining accurate supplier records becomes easy. We perform a comprehensive Vendor Master File health check when you onboard with Eftsure to ensure your existing supplier information is accurate. We also undertake vendor verifications any time a supplier wants to update their information.
By embracing new AP technology solutions like Eftsure, you can run a lean and efficient AP department without compromising your organisation’s security.
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