How technology can quickly identify fraud, waste and errors
Having gotten through COVID-19, many organizations now find themselves facing the potential of an economic downturn. At times like these , adequate working capital is critical. So how can you find fraud, waste and errors — especially when vendors, contractors and employees are under increased economic pressure themselves?
The need for cost savings is immediate, and whether you’re in the private or public sector, there's no doubt your organization is losing some amount of revenue to fraud, waste and errors.
The Association of Certified Fraud Examiners (ACFE) estimates that organizations around the world lose 5% of revenue to fraud. In 2019 alone, the US government made more than $175 billion of improper payments (e.g., sending an incorrect amount or giving money to the wrong person).
So how much might your organization be losing? We want you to be able to answer that question — and, of course, to prevent losses like these in the first place. Diligent Robotics optimizes the way governance professionals work by automating time-intensive and repetitive — but critical — business operations to help organizations find fraud, waste, and errors — and stop financial leakage fast. But before we get into the benefits, let’s look at two myths that keep organizations in the dark.
1. Our ERP System Is Enough
ERP controls work great when your processes and data are perfect. But when your AP team gets handed an invoice due in two days because it’s been sitting on a manager’s desk for a month, or when some data integration has duplicated vendor records, you know that errors and mistakes occur frequently.
2. Our Cost-Recovery Service Handles It
Third-party cost-recovery services are incentivized to find fraud, waste, and errors; but not to help you fix anything. Their business model depends on finding your errors and fraud and keeping a portion of the proceeds — not on driving your process improvements. And, when you hand over your data to a cost-recovery vendor, do you know how secure they actually are?
Now that we’ve covered a couple of myths, let’s move on to some facts: we’ve helped hundreds of organizations recover revenue lost to internal and external parties.
As you work through the results generated by Robotics, updates to your dashboard track the ROI and savings.
"As organizations move beyond COVID-19 crisis management and into recovery mode, cost reduction efforts are going to be front and center."
Real-World Examples of Money Found Fast
Before we get into the product benefits, here are five non-identifying customers who have quickly detected revenue leakage, fraud, and errors with Diligent software:
- A global farm equipment manufacturer found $3.6 million in fraud instantly. Over many years, a maintenance manager received vendor kickbacks for creating fake invoices. These invoices were found based on an anomalous flag by Benford’s law: there was an unusual spike of invoices in the data starting with the digits “47.”
- A university used our solution to help uncover an IT asset hardware misappropriation scheme worth over $350,000. As the program expanded, over $100,000 worth of duplicate invoices and $200,000 of savings in grants compliance oversight was found.
- An $18-billion materials manufacturer looked at suspicious AP payments and invoices. By comparing hundreds of high-risk keywords against their data, they found an employee was submitting invoices for their child’s Harvard tuition. Another employee had been granting contracts to a business they owned.
- By using the outlier detection capabilities in Robotics, a healthcare customer found it was being charged three times the average rate for medical supplies. Nobody had noticed the discrepancy, because the vendor changed the number of units that shipped per box; something the ERP system didn’t flag.
- A business services company, whose chief audit executive (CAE) was constantly traveling “on business” to cities where there were no offices, found money fast—on investigation, they discovered this football-loving CAE was going to sporting events.
A continuous monitoring program, powered by Robotics, makes it possible to quickly and easily identify errors like duplicate payments and erroneous invoices.
The Benefits of Continuous Monitoring Powered by Diligent Robotics
We’ve already established that you’ll see a quick ROI by finding money fast. Below are five more advantages.
1. Expert Support : Our team will help you share your data to our secure cloud environment, and then apply it against our suite of analytics. You can start immediately investigating red flags and find money?—no significant IT support or data scientists needed.
2. More Recovering, Less Wondering : You’ll be able to easily monitor 100% of your transactions, so you can stop erroneous and improper payments from going out the door, and recover money faster.
3. Data, Data and More Data: From residential and business addresses, to US government spending and Census data, you’ll have access to plenty of existing Robotics scripts.
4. A Versatile Toolkit: Think of cost containment as a launching point for a complete spend and controls monitoring program. You can apply these tools to analyzing revenue leakage, tax compliance, benefits reconciliations or inappropriate purchase card expenses, for example.
5. Easy-to-Understand Results: Your team receives transparent reports directly so you can instantly demonstrate ROI to stakeholders and the board. It's easy to tweak, tailor, and take ownership of your analytics program.
As organizations brace for a possible recession, cost reduction efforts are going to be front and center. Instead of having to potentially lay off staff, freeze hiring, slash marketing budgets or cut employee programs, wouldn’t it be nice to find money that’s rightfully yours?
NEXT-LEVEL DATA AUTOMATION POWERED BY ROBOTICS
- Everything that's included in the solution
- Added benefits and available resources
- How Diligent Robotics can scale with you as your program grows