ERP SOS – Fraud wiping out Profit



Fraud and corruption are realities of our time. It is naive to believe that any institution or organization is immune.


The old adage “prevention is better than cure” most definitely rings true. Prevention is certainly the best way of managing fraud. The tighter the controls and procedures, the more difficult it is for unscrupulous employees to take advantage. ERP steps up controls and procedures to prevent fraud and corruption.


Audit Tracking

An ERP system can be set up to issue thorough activity reports, grant users access to transaction history, verify external data sources, display time/date/user identification data, and integrate reporting with other features. This is in contrast to manual systems, in which documentation can “get lost” or be replaced without a trace. Users can check for cash transactions and even dig back to source documents using specific functionalities.



You may also set up alerts on specific fields to receive notifications whenever changes are made. For instance, you can set the system up to notify you anytime the names, addresses, or banking information associated with a customer account changes.


Access Restriction

Another useful function included in most ERP accounting software solutions is user access restriction. By enforcing segregation of duties along with strict authorization mechanisms throughout workflows, an ERP system will prohibit fraudsters from performing operations they aren’t authorized to do. It’s important to regularly audit your users’ permissions periodically to ensure that they don’t have access to system functions they don’t need.


Multi-Employee Workflows

Use workflows and role permissions to ensure that different employees are responsible for entering invoices, approving them, and creating payment batches. This will ensure that management has an opportunity to review invoices for legitimacy after they’re entered, and that payment can only occur once the invoice is approved.


Audit Adjusting Journal Entries

Make a point of running reports regularly to audit and review your AJEs to ensure they’re accurate. And don’t fall into the trap of assuming that all fraudulent entries are rocket science. Many high-profile fraud cases have been carried out by writing simple journal entries between cash accounts and expense accounts.


Regular Bank Statement Reconciliations

This will ensure the ERP is updated promptly and any suspicious transactions are identified early and remedy actions taken.


Treat Inventory Shortages as an Anomaly

But with a solid ERP solution and adoption of proper business practices (such as verifying quantities of received inventory and recording bin locations in the system), erroneous stock levels should be anomalous – and treated that way!


In the dynamic, often challenging landscape of the trading industry, leveraging advanced tools like ERP systems can make a substantial difference in your profitability. As competition intensifies and the market continues to evolve, the question isn’t whether you can afford to implement an ERP system, but whether you can afford not to.


About ACEteK – SAP Business One ERP System Partner

We’re an SAP Partner, with a long standing track record of successful SAP Business One ERP System Software projects, delivered on time and on budget. The ACEteK team has established its reputation, and differentiated itself from its competitors, by offering all its clients expert knowledge and advice, combined with a friendly, personal and attentive service.


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