Combat Fraud With New Tool That Also Increases Profits
Fraud hurts more than an organization's bottom line
. It will tarnish, even destroy, an organization's reputation. Fighting fraud in the workplace, however, is a daunting task because thanks to ever-improving technology fraud perpetrators are becoming increasingly more sophisticated.
As the most common and most costly of all white-collar crimes, procurement fraud, or contract fraud as it also is known, costs businesses in the United States billions in losses each year. Federal government estimates are that close to $50 billion a year are lost to procurement fraud and that is just fraud associated with government work. Several times that much occurs when non-government related fraud is included, but the exact amount is not known
Since the U. S. National Procurement Fraud Task Force (NPFTF) was created in 2006 to combat public and private sector fraud, more than 400 criminal convictions have been pursued. The NPFTF's work has resulted in 300 plus convictions and hundreds of millions of dollars in civil settlements and judgments. This, though, is just the tip of the iceberg.
According to recent PricewaterhouseCoopers (PwC) research, corporations and other organizations have greater exposure to procurement fraud than most senior managers and board members realize, especially during economic downturns. Areas that are most vulnerable include bidding processes, information management systems, vendor maintenance, and invoice and payment processing. Here are some red flags that PwC says you should watch for:
Information management Inconsistent data compiled across procurement-related systems Significant data quality issues relating to spend data and vendor data
Procurement process Lack of controls around use of preferred vendors, negotiated contracts
Low compliance with corporate preferred buying guidelines
Vendor maintenance Multiple instances of the same vendor within master data
Inconsistent vendor payment terms across the organization
Invoice and payment processing Duplicate payments
Inefficient invoice processing
To effectively combat fraud, organizations must become more sophisticated than the perpetrators. That means tighter controls and 100% transparency. It also means being open to change. PwC recommends using tools that qualify vendors and streamline procurement processes. IT systems also must be strengthened by focusing on the set up and maintenance of vendor master files and other support systems. The system deployed also must provide data about procurement trends, payment patterns, and changes in the mix of products and services procured to find indications of wasteful or collusive behavior.
These levels of control are available with new approaches to procurement. New procurement methodology and technology make it possible to attain 100% transparency, full accountability and reporting, tight control, greater efficiencies, detailed task management and thorough information archiving -- all via a web-based communications and workflow system that eliminates e-mails and other communications that can be manipulated, hidden or destroyed.
This is how it works. From the moment a project is conceived, the idea is entered into the system's database. Suppliers are identified by the buyer and entered into the buyer's database of pre-qualified suppliers, and this is where they are stored until the buyer makes a change. Each supplier is thoroughly vetted to determine capabilities, location, equipment, staffing and special attributes such as being environmentally compliant. Detailed job specifications are then entered. Based on new procurement methodology, the computer matches the job specifications with only those suppliers capable of doing the work. The purpose of the new procurement method is to establish a fair competitive pricing environment so only qualified suppliers are asked to bid. The bids are made, and the supplier is chosen. All of this happens in minutes, and the process can be repeated for subsequent jobs eliminating negotiated rates that could become suspect.
Once the supplier is chosen by the buyer, both buyer and supplier responsibilities are assigned to establish timelines and project accountabilities. Who can access the system and when also is entered to make sure only those with a need to know have access at any given time. Then, every detail about the project -- from changes through production to delivery and invoicing -- is entered and recorded. Everything is archived and nothing can be modified or erased. A permanent record is established for future reference.
This level of reporting and documentation consolidates vendors and streamlines the procurement process, as recommended by PricePricewaterhouseCoopers. The transparency, compliance, consistency and accountability that it creates protect against fraud.
Even better, the new competitive pricing methodology reduces the procured costs of goods and services. In the print industry, for example, this new process is reducing procured print costs by 25% to 50% with no upfront investments for the web-based system. Reductions occur because the suppliers know that the way to win work is to bid low with deeply discounted prices, and this is typically done to fill production downtime. All know that filling downtime is the key to success. Suppliers also know that when used consistently to keep work and revenue flowing, this approach will increase their bottom-line profitability by about 10% of their revenues. The supplier wins, and the buyer wins. There is no incentive for fraud.
About e-LYNXX Corporation
e-LYNXX Corporation, the North American procurement authority, is exclusively endorsed by Printing Industries of America (PIA) and Educational and Institutional Cooperative Purchasing (E&I). Founded in 1975, e-LYNXX has three divisions. American Print Management provides enterprise print procurement solutions and patented competitive methods to reduce costs for direct mail, marketing materials, packaging and other procured print. Patented Procurement Method grants patent licenses for supply chain optimization. Government Print Management offers U.S. GPO bid services, access and assistance. www.e-LYNXX.com 888-876-5432
by: William Gindlesperger
Find Wholesale Coffee In New York Easy Guide to Solar Panel Electricity for Your Home Fat Burning Furnace The New Secret To Torrent Fast cash payday loans- Have a delighful New Year with rapid financial help Do You Need A New Computer? The Easternmost Property Market In New York Are You Looking For A New Home? Online gambling is subject of new book Gps Tracking With The New York Courier Service Charlotte new guns, Charlotte guns for sale, Charlotte gun safes Instant cash loans no paper work- No hassle financial assistancefor New Year Avoid Structural Damage with New Gutters from a Round Rock Gutter Company Is Your Brain Mush As A New Entrepreneur?