How to Ensure the Security of Your Supplier Payments?

To secure your payments and prevent fraud, Diapason recommends integrating the Trustpair solution into your TMS!

Fraud related to supplier payments is a significant challenge for businesses. According to a 2020 PWC study, fraud costs companies an average of $40 billion worldwide.

In France, one in two companies fell victim to at least one attempted wire fraud in 2022. Several recent fraud cases underscore this reality, such as a real estate developer swindled out of €38 million in February and the Saône-et-Loire municipality falling prey to a “fake president” scam amounting to €350,000.

Therefore, companies must take a proactive stance in their fight against fraud to safeguard their finances.

The quality of supplier data is crucial in the fight against fraud. However, companies are often ill-equipped to ensure the reliability of this data and effectively address fraud risks. Manual processes, such as the “four-eyes” principle or task segregation, are prone to errors, time-consuming, and burdensome for operational teams. Data comes from different systems and is processed by multiple individuals, making it challenging to implement effective controls.

Therefore, companies need to establish more robust processes to protect their supplier payments.

To ensure the security of your supplier payments and prevent fraud, Diapason, a Treasury solution provider, and its partner Trustpair, offering a fraud prevention solution for wire transfers, recommend implementing the following four best practices

1. Vérify the Reliability of Data from the Start of the Relationship

Payment processes are often lengthy, and the temptation is to wait until the supplier requests payment to conduct a data check. However, this approach can lead to haste to avoid payment delays. We recommend systematizing checks at the beginning of the supplier relationship, especially during requests for the addition or modification of banking details. This approach allows for the automation and tracking of checks throughout the payment chain, saving time for teams.

2. Secure Data Flows and Information System Access

Securing data flows is essential to prevent fraudulent activities. It is important to encrypt payment files and third-party files that move from one system to another to ensure data integrity. Additionally, manual data imports into the TMS should be prohibited, and access to business tools should be restricted to prevent fraudulent actions.

3. Configure Tools to Detect Any Abnormal Behavior

It is crucial to properly configure payment tools to detect any abnormal behavior. In this regard, effective management of banking authorizations is essential as it directly influences fraud protection. Implementing a centralized validation process is recommended for companies deploying payment tools across multiple subsidiaries. This approach allows subsidiaries to maintain independence while providing the holding company oversight.

4. Implement Ongoing Internal Control Processes

Establishing internal control processes, such as the “four eyes” principle, serves as an initial defense against fraud. However, to enhance security further, companies can empower signatories and ensure they play a significant role in payment security.

It is also essential to raise awareness among employees involved in payment processes about the risks of fraud and provide training on best practices. Financial departments should foster a culture of vigilance and stringent security measures against fraud, involving all stakeholders within the company.

To secure your payments and prevent fraud, Diapason recommends integrating the Trustpair solution into your TMS!

If you are planning to implement a wire fraud prevention project and are looking to integrate the Trustpair solution into Diapason, our experts at Diapason will support you throughout your project!