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Payables is the largest spend channel for most organizations. And, organizations recognize the importance of successfully managing this spend with 55% of all businesses citing Payables as either “very” or “exceptionally” important to organizational operations in a recent Ardent Partners study.
While enterprises understand the value of payables, it’s one of the most challenging spend channels to control due to multiple methods of invoicing, tracking and payment.
AP data holds business-critical information. To minimize Payables risk and increase efficiency, organizations the need complete visibility into spend data for better-informed decisions.
How can enterprises begin to understand and evaluate their AP spend in real-time? By eliminating siloed data.
The Problem with Siloed AP Data
The typical AP process involves multiple spend channels and vendors managed by a number of departments, all using different systems.
These processes become disjointed, resulting in a siloed view of AP spend data that can leave organizations exposed to risk. Organizations lack visibility into where spend risks might lie, both internally and externally. These risks include duplicate payments, vendor master integrity, fraud schemes and undetected losses.
The Impact of Incomplete AP Visibility
Duplicate payments occur far more often than most realize when it comes to AP spend. While most only happen at a rate of 0.1% to 0.5%, they can pack a big punch for companies where annual payments spend can exceed $500 million.
With better visibility into AP spend, it becomes easier to identify duplicate payment errors, reducing the potential impact of this type of AP risk. In fact, with Oversight’s AI-powered Payables solution, organizations can analyze and detect cross-program duplicate payments, along with the employees and vendors frequently involved. Furthermore, Oversight applies fuzzy matching, an AI capability that is a more robust method for detecting duplicates than exact matching.
Vendor Master Errors Due to Siloed Data
A lack of visibility becomes especially detrimental when evaluating vendor master integrity.
Suppose every purchase from a vendor is spread across multiple records. In that case, it becomes difficult for an organization to gain a complete view of spend with the entity, which opens up an organization to internal and external fraud, delayed payments, and can negatively impact ongoing and future negotiations.
For example, with incomplete data, an organization might go into a vendor negotiation thinking that it only spends a total in the hundreds of thousands when the amount is actually in the millions, which ultimately limits negotiating power and results in avoidable spend losses.
This is just the beginning when it comes to the vendor master list. A lack of data integrity in the vendor master is often a contributing factor to devastating fraud, which could be prevented with AI-powered AP spend analysis.
There is a goldmine of data in AP, and it can be used to deliver protection from fraud, misuse and waste by watching patterns and learning inputs from AI. With this, enterprise organizations can control their spend risk – no matter where it resides.
Learn more about the spend risks associated with AP fraud and how Oversight helps provide needed visibility.