Kevin Phillips is MD of idu Software.

Life is not under our control, and risk is everpresent, but technology has provided a way of reducing the risks that threaten our businesses – such as fraud or bad debt.

Imagine that there is a red flag raised every time a pattern of suspicious invoices or a non-paying client emerges, enabling you to shut down the problem and minimise your exposure to the threat. It can be done quite easily – without employing more people to monitor and check what is going on. It’s simply a
matter of plugging in the right system.

These days, there is no reason to accept an excuse that you can only examine 1 June’s expense figures in the middle of July, when the books for June are closed and the monthly report comes before the board meeting. That means a clever fraudster, to take a worst-cases scenario, has seven or eight weeks to cover his tracks before someone will even be able to see the information that might raise suspicion.

As technology has moved beyond the days of paper ledgers and dusty archives, we’re able to view exactly what managers and departments are spending – even before the month is out. We need to raise our expectations – demand that solutions are implemented that will let us review today’s figures tomorrow. The old adage “information is power” has never rung more true. Knowing what’s happening in your business now, not eight weeks ago, is becoming an absolute necessity for survival.

The sophistication of our tools needs to match the complexity of our operating environment. Traditional accounting tools are no longer enough. A clever fraud will account for everything entirely according to the rules – it is only by keeping a regular eye on the big picture that you can see patterns that ought not to be there. Where there is transparency, there is collaboration and a wider audience, making it difficult to hide anomalies. It is one of the strongest internal controls that an organisation can have (and the easiest to implement).

With the right tools, you can reduce your risk of major losses by making sure your financial information is timely, accurate and widely distributed.