More companies are using analytics to prevent and detect financial abuses within the supply chain, according to a recent Deloitte poll. It found that 35 per cent of companies are using analytics to mitigate third-party fraud, waste and abuse risks in supply chains – up from a quarter of companies in 2014.
Problems such as fraud, waste or abuse are prevalent in supply chains – one in three companies in the Deloitte poll said they had experienced these supply chain problems between 2014 and 2017. The highest levels were seen in the consumer and industrial products sector, followed by energy and resources. Deloitte's Mark Pearson said: “Unfortunately, increased vigilance doesn’t translate into lower instances of fraudsters trying to perpetrate their schemes. Even the most advanced analytics users should work to constantly evolve their efforts to stem fraud, waste, and abuse in supply chains.”
Fighting supply chain fraud with automated invoicing?
Financial abuses can include bribery, bid-rigging and collusion as well as payment fraud. Deloitte's Larry Kivett said: “In the energy and resources industry, I’ve seen complex capital projects rife with bribery, bid rigging, collusion, fraud, and other schemes.”
Some of the strategies to mitigate financial fraud in the supply chain overlap with the treasury function – for example introducing e-invoicing systems can eliminate some of the human input, therefore limiting opportunities for fraud. Kivett adds: “Beyond reducing sole-sourced procurement to manage risk, supply chain executives can also prevent financial abuses by working to improve supplier invoicing timeliness, accuracy, and approval processes.”
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