In this time of economic insecurity, payments fraud has the potential to hit businesses harder than ever before. Currently, the average US business is losing $300,000 to payments fraud each year according to the latest Financial Census, a study which surveyed 2,750 senior finance executives across the globe – 15 percent of whom work in the retail, catering and leisure industry.
This staggering annual loss to fraud is important to note, as the report findings come at a time when US restaurants in particular are experiencing a surge in returning workers and restaurant revenue. This surge of revenue and demand for food related services – mostly paid for through digital, contactless transactions – could potentially attract cybercriminals to commit acts of fraud all the more. This is due to two reasons.
Firstly, many restaurants haven’t secured their payment processes enough to keep up with burgeoning “distanced” payments in the form of online ordering on a restaurant website, QR code menus or “card-not-present” transactions. Secondly, cybercriminals tend to be technologically savvy, able to penetrate this vulnerability, to scale-up the speed, volume and sophistication of their attacks.
The last thing businesses need during a period of economic certainty is to lose profit unnecessarily. The good news is that this doesn’t have to be the case. Businesses can protect themselves from payments fraud through an end-to-end procurement solution that empowers businesses to digitally process large payment volumes, and enable transparent control over payments processes and funds.
So what are some of the benefits of AP automation, and how can using this technology protect restaurants from fraud?
Centralizes the Payment Process
Many restaurants have decentralized payment systems, which makes it easier for fraudsters to intercept and redirect incoming payments into their personal accounts – and quite discreetly too.
Compliance is a crucial factor in detecting and safeguarding businesses against invoice fraud, which in practical terms, means centralizing transactions through payments solutions software. This in turn creates a channel of absolute transparency into every payment – and in real time – thus mitigating or stamping out fraudulent attempts altogether.
Creates a System of Checks and Regulations
As restaurant businesses seek to thrive, and not simply survive amidst rising inflation levels, creating a robust and sustainable security system will significantly help them get there. Human error is a real likelihood especially given that many businesses have multiple locations, or perhaps are undergoing periods with fewer staff than normal.
In addition to the promise of centralizing payments into one channel, accounting software not only reduces manual administrative burdens and stresses on employees, but also flags any fraud-risk or vulnerable points in the payments chain to the designated person/people in control of the business purse strings.
Uses Anomaly Detection Technology
Restaurants are part of a fast-paced and highly-pressured industry – the perfect climate for opportunistic fraudsters. Duplicate or unfamiliar transactions can easily slip through the cracks without a software that provides anomaly detection services. This tool can flag duplicate or unusual payment patterns, can be specifically tailored to recognize verified transactions and identify who authorizes outgoing invoices from within the business. This helps finance teams spot red flags and potential areas prone to fraud.
Businesses want to turnover healthy volumes of cash-flow, regardless of the wider economic climate. This can be achieved not only through sustained and/or increased volumes of customers, but also through effective cash-flow management.
As the payments process becomes increasingly digitized, payments fraud will continue to be a heightened threat to many industries, particularly those most vulnerable such as hospitality and restaurants. AP Automation creates a system where centrality, transparency and security all work together to reduce this phenomenon.