5 Reasons Your Financial Data is More Secure in the Cloud

According to the 2010 Certified Fraud Examiners report, companies typically lose 5% of annual revenue to fraud. Fraudsters engage in things like check tampering, secret over-payments, and skimming money to help themselves to an extra piece of the company pie. And it can take months—a median of 18 months according to the study—to detect fraud.

Smaller business, bigger fraud risk

Small business owners don't want to think anyone working for them would steal from the company. Unfortunately it happens every day.

Small businesses are, in fact, at greater risk for fraud than large companies. Why? Because, in the typical small business office, you'll find:

• Sensitive financial data lying around the office. A single company check has everything a fraudster needs to devise a stealing scheme. Every bill or check lying on the desk is a security risk.
• No fraud-prevention process. Who approves payment of a bill? Who actually makes the payment? Who verifies money is being sent to a valid vendor and address? Without defined processes and specific cross-checks, it's easy for fraudsters to play tricks with company money.
• No warning bells for security breaches. Most small businesses don't have tools in place to help detect fraud or a raise a flag when security is at risk. That's why it's typical for lots of money to go missing before fraud is even suspected.

5 ways moving to the cloud improves security

Transitioning accounts payable and accounts receivable to the cloud is one of the best ways to reduce your risk of fraud.

CPA and Certified Fraud Examiner Jason Blumer says, "When you take tangible tools out of a process and insert digital, security is an automatic."

All-digital, cloud-based solutions like online bill payment and online invoicing from Bill.com help protect your money because they:

1. Bring proven best practices to automating Accounts Payable (AP) and Accounts Receivable (AR)
   Thankfully, you don't have to become an expert on preventing fraud. When you sign up to use Bill.com, the system will walk you through the steps of best-case money management, asking you to define roles for your team and create log-in requirements to track users.
2. Eliminate paper
   With Bill.com, bills come to your Inbox, not your mailbox, and sensitive data is securely organized in virtual file cabinets. Instead of writing checks, you can make ACH ePayments that transfer money bank-to-bank and eliminate check manipulation fraud. For vendors that require checks, use a Bill.com check that draws from a Bill.com account so your account information is never exposed.
3. Define money-touching responsibilities
   Technically, it's called "separation of duties". The person that does data entry on a bill should not be the same person that authorizes payment. Payables and receivables are multi-step processes, and when you use Bill.com, the system will help you assign specific responsibilities to the people on your team. Users can only log in to authorized data and all payments are routed through the approved workflow.
4. Keep track of every detail about a payment
   Because each Bill.com user has a unique log-in, you can easily track who did what, when. From the time a bill is received, to the time payment is made, you'll have a complete audit trail of every transaction and know who was involved—which makes the loopholes fraudsters exploit very hard to come by.
5. Provide more security than you can at the office
   Cloud computing providers invest heavily in securing their applications and protecting data uptime. By taking advantage of the features built into cloud-based solutions like Bill.com, small business owners don't have to worry about investing in security solutions or extra servers in the office. With accounts payable in the cloud, you won't need IT help in the office.

Prevention costs less than detection

Preventive measures to minimize the risk of fraud cost significantly less than detection and corrective measures.

Putting payables and receivables in the cloud is a great way to make sure you don't lose money to fraud. It's also a great way to save time and money by improving a process that's traditionally paper-based and error-prone.

For more ideas on how you can prevent fraud, read Small Business Fraud: 8 Ways to Protect Yourself.

For CPAs: Learn more about how you can help your clients use cloud computing to minimize the risk of fraud. Watch our web seminar.