One of the biggest challenges for many companies is ensuring that the B2B payment process runs smoothly. The problem is that this process is notorious for being manual, which can cause a lot of hiccups. The process often involves legacy systems that aren’t always seamlessly integrated or automated, and as a result, many finance teams are not properly protecting their vendors and payment cycles due to the manual work involved. Unfortunately, manual work creates weak links in the B2B payment process that can lead to cyberattacks, fraud, and errors that cost businesses a lot of money. Let’s examine a few examples where manual work can expose a business and its supply chain to these problems.
Email is not a secure channel of communication. We’ve cited this stat several times before, but we’ll say it again: according to the FBI, $50B dollars was lost due to business email compromise (BEC) between 2013-2022. And this number will not abate any time soon. There are several ways a bad actor can intercept or compromise the email of a vendor and a client organization. Malicious emails impersonating executives at a company urging an employee to click a link contained therein, or an email with malware attached to it are common ways criminals can gain access to an email account. This can quickly turn into a huge mess for the company whose employee was hacked.
We can easily see the innocent human error that caused the BEC (i.e. opening a social engineering email or clicking a link). But how does manual work play into this and contribute to the problem? Most vendors manually attach and send their W-9 forms and bank letters to their client company via email to get up and running as a vendor and then get paid. The client company might even email them back requesting more information, which the vendor will, again, manually attach to the email. The vendor will also attach and send their invoice once they deliver the goods or services to the company. This is very dangerous because if the email of someone at either organization has been compromised, the bad actor now has access to all the documents that were sent within the email exchange. Also, emailed documents means that an employee will eventually need to upload these into their other systems or input that information manually, which can lead to errors. But more on that in a minute.
An easy-to-use vendor onboarding portal means that suppliers can automate the way they get up and running as a third-party vendor. Rather than attaching and emailing documents to their clients, vendors can log into the self-service portal themselves and ensure that all the proper documentation is uploaded and then automatically synched with the client company’s other systems. This reduces manual work on the side of both companies because it doesn’t require having to download and attach several documents and email them. The vendor can now upload their documents knowing that the information will be correctly entered into other systems and flow through the payment workflow. Most importantly, a heavily secured onboarding system ensures that even if an email is compromised, the bad actor won’t gain access to sensitive documents uploaded in the portal because the system is guarded and much more difficult to breach. So even if the email thread is compromised, there is another layer of security to ensure that sensitive vendor data is protected.
Data entry is the ultimate manual activity that leads to human error and fraud. When a company has a high volume of invoices, it becomes difficult to keep track of them. If the business doesn’t have an automated way of uploading bank account details and other information into their ERP or other databases, there is a big chance the employee can make an error. And if they receive phishing emails from a fraudster, the employee might not check that all the information is correct, which could lead to them entering the wrong information into the other databases, leading to wrong payments. Furthermore, when there are so many invoices that require payment, an overworked employee trying to get everything paid on time can easily overlook the details on the invoice to see if it matches past invoices. Again, this could lead them to upload the wrong information. Perhaps they do this and bypass the segregation of duties to avoid late payments, or maybe they assume that the person who forwarded them the invoice already checked that the information was correct. Either way, there are several points where human error can occur and lead to incorrect payments all because manual data entry was involved.
Trustmi reduces the onerous duties of manually inputting data into different systems. Through the self-service vendor portal, invoices are not only secure, but the information contained therein is automatically passed through to the other systems to ensure that all the information matches internally and is accurate. A sneaky vendor or fraudster trying to upload multiple invoices to get paid twice can also get caught before funds are released because Trustmi’s platform can detect duplicate payments and flag them for review.
Most businesses use excel to manage different types of data. Unfortunately, many finance teams use excel to keep track of B2B payments. Spreadsheets involve a lot of manual data entry work to maintain and update so it’s easy to make mistakes. Additionally, it’s easy for bad actors to enter in fake vendor information and invoice information without the finance team realizing it.
The information within spreadsheets isn’t secure. As the amount of data within a spreadsheet increases, so do the concerns around governance, security and compliance. Typically, there aren’t strict internal controls around managing access to spreadsheets. Because they are ungoverned, spreadsheets can be easily shared and distributed. For example, a finance employee might create and own a spreadsheet containing sensitive data that accidentally defaults to giving access to a large group of people. This provides a bad actor with multiple entry points to access the spreadsheet to update information to divert funds. As another example, a spreadsheet can be added to an email thread where one of the recipients has had their email compromised. Now a bad actor has access to all sorts of information that they can use to continue their attack.
Managing information in spreadsheets also makes it easier for internal bad actors to access data that they can update to steal money. Because they can easily gain access to spreadsheets, they can get away with making advantageous changes to the information. Because it is difficult to govern and track all the changes and information that are updated in spreadsheets, these updates (and the perpetrator) can go undetected.
With a system like Trustmi, finance teams no longer need to use spreadsheets to keep track of vendors and manage their payment cycles. By guarding and managing vendor information, invoices, and payment cycles in a secure system, businesses can have greater control over who accesses that information and can change it, which can help avoid fraud. Eliminating the use of spreadsheets removes the manual work of data entry and the creation of multiple versions of spreadsheets that can contain conflicting data that causes funds to go to the wrong place.
These are only three examples of ways that manual work can cause a business to fall victim to fraud and errors. There are several other ways throughout the payment cycle where there’s manual work that causes trouble. For businesses to truly secure their B2B payments, they must get rid of all the manual work that typically consumes their process and leads to wrong payments.
Trustmi can help by simplifying the process and removing the manual work that can overburden finance teams and ultimately lead to errors and fraud. Get in touch today to learn how our platform can help your team automate your payments process.
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