85% of CFOs Are Prioritizing Fraud Controls for Incoming Payments

New PYMNTS data shows that businesses’ accounts receivable operations have been underfunded for fraud prevention.

Compared to their accounts payable counterparts, the investment deficit has created a gap — and risk — that needs to be closed.

This, according to findings in “The Overlooked Importance Of Securing Incoming Payments,” a PYMNTS and nsKnox collaboration that is part of the B2B Payments Fraud Tracker® Series, which highlighted the need for action.

This form of fraud comes in a few unsavory flavors. A common form of AR fraud is internal fraud, involving deceptive employees stealing from employers. Average losses of nearly $1.8 million attend most instances of internal fraud, but companies often don’t talk about it.

That silence is deafening and costly, as professional fraudsters typically do AR damage at far higher amounts and can often be harder to detect until it’s too late.

Fortunately, more CFOs are facing the realities of AR fraud and prioritizing systems investment that combats this at the data level, proving highly effective for those doing so.

“Because AR fraud often stems from weak or ineffective internal controls, it is important for companies to modernize the systems that govern incoming payments. If done right, a streamlined and secure AR system would limit the ability of rogue employees as well as external fraudsters to steal funds,” the study states, adding that “by securing incoming payments, companies can ensure that their cash flow is not needlessly impeded.”

As awareness spreads of the effectiveness of AR fraud detection, more CFOs are getting the message and budgeting to add this capability to their payments stack.

“Given the obvious shortcomings of manual processes and the clear benefits of advanced technological alternatives, companies are turning toward digital solutions in droves. According to a PYMNTS survey, 85% of CFOs are currently investing or plan to invest in digital solutions for fraud prevention and risk management,” per the study.

Additionally, over half (56%) of retailers have invested in AR platforms since the pandemic's start. PYMNTS found that 64% of companies that had not invested in AR are currently investing or planning to invest in this area.

Get the Report: The Overlooked Importance Of Securing Incoming Payments