In light of the recent outcry against fraud and corruption that has swept the nation in recent months, it is important to remember that there is readily available technology able to prevent fraud on both a corporate as well as government level.
Fraud and corruption are realities of our time. It is naive to believe that any institution or organization is immune. ERP is one of the tools available that helps provide controls to eradicate fraud from any organization. Here are some ways ERP can help:
The old adage “prevention is better than cure” most definitely rings true. Prevention is certainly the best way of managing fraud. The tighter the controls and procedures, the more difficult it is for unscrupulous employees to take advantage. ERP steps up controls and procedures to prevent fraud and corruption.
ERP can assist companies in ensuring compliance with legal requirements and accounting rules. Many cases of internal fraud result from the abuse of the accounting system. ERP prevents this abuse and can assist businesses in mitigating fraud.
Manual systems are wide open to abuse because documentation can be misplaced or changed, with little or no audit trail. ERP gives companies tighter control of processes and the benefit of comprehensive audit tracking. Alerts can be built into the system so that an email is sent to someone in authority for approval, before any major changes are actioned.
4. Segregation of duties
The cornerstone of any audit control separates duties between people. ERP enforces segregation of duties and strict approval mechanisms, which prohibit fraudsters from performing functions they are not authorized to. Modern tools like electronic funds transfers can also be automated to remove any unnecessary risks around manual payments.
Procedures outside of the accounting system are also open to abuse. Biometric controls can help protect a business against theft by providing physical access control over who can access the stock room etc. Your ERP can assign access rights and keep an updated record of access granted.
There’s no denying The Internet of Things and the resulting technology advancements provide 24/7 access to powerful tools for tracking stock movements, levels, sales trends and purchase requirements.
ERP is the perfect backbone to give any business the control and security required to take advantage of this new technology and its benefits.