74% of organisations were targets of attempted or actual payment fraud attacks in 2020, as per AFP’s report. A business that has to deal manually with a large number of receipts has nagging security concerns. Document frauds are digging a huge hole in the global economy lately and threaten to grow each day.
Fake receipts are made through Photoshop or other similar software to propagate theft. While people fail to detect minute alterations in fraud receipts, the software is quick to find them. A receipt-scanning software is an ultimate saviour for automating the receipt-related process and overcoming these challenges.
This article talks about the various kinds of receipt fraud and how receipt scanning can help to prevent and detect them.
Receipt fraud is a form of money laundering. Enlisted below are the most common ones:
- False Receipts: Fake receipts (for products not purchased) are created and used to push false claims for refunds.
- Altered Receipts: Changed receipts (like the amount paid or the date) are made and used to claim refunds.
- Duplicate Receipts: These are submitted (for the same expense) to get multiple reimbursements.
- Fictitious Vendors: Conjuring a fake vendor and submitting false receipts for products or services they did not provide.
- Skimming: Employees such as cashiers or others might steal cash and change the receipts to hide their theft.
- Point of Sale Fraud: Employees might manipulate the point of sale scheme to create false receipts.
- Credit Card Fraud: A person steals someone’s credit card, makes purchases, and then alters receipts or creates false ones to cover up.
What is Receipt Scanning Software?
Optical Character Recognition, or OCR, is the technological process that enables the conversion of an image with text into machine-readable text. Artificial Intelligence or AI simulates human intelligence to extract the actual meaning from the text, thus, recognising each part of a receipt.
The user is just required to upload their receipts to the online receipt scanning software via mobile app or email. The software will extract relevant data and present all figures in a standardised digital format, all the while keeping an eye for anomaly detection, Photoshop activity, alteration, and other similar methods that fraudulent people employ.
Receipt scanning technology is helpful in detecting fraud and preventing the same. There are several ways in which the receipt scanner can work to ultimately help its users in becoming safe and secure. Here are various methods that receipt scanning employs in identifying and preventing fraud:
It is the constant observation and analysis of data as soon as it is developed. There is minimal delay between the data extraction and the monitoring operation. In the real-time monitoring method, the data gets collected and processed soon after availability. This information is further used to detect and respond to any activity in the system.
Receipt scanning technology permits businesses to scan their financial markets in real time. Fake receipts, duplicate receipts, transactions that cross the normal range, or any other suspicious activities are efficiently detected. When problems develop, they are quickly identified and dealt with due to the real-time dashboard alerts that can display the data gathered and evaluated. The solution helps businesses to take prompt action, thus preventing any fraudulent transactions.
Also called text classification or automated classification. It is the process of the automated assigning of categories or labels to any textual data on the basis of its content. This process involves the usage of AI technology or machine learning techniques. Here there is a proper analysis of the textual data to make predictions regarding the category to which it belongs.
The main goal of automated categorisation is to categorise bulks of text containing data rapidly and accurately.
Receipt scanning software technology automatically classifies or categorises transactions according to their type. Spotting anomalies becomes easier for businesses via this categorisation. It further allows organisations to spot fraudulent activities, such as costs unrelated to the company’s operations or transactions that are against their standards. Thus, receipt scanning’s automatic categorisation method makes it easier to search, analyse, and understand any fraudulent approaches.
It is the process of data collection, cleaning, transformation, modelling, and visualisation to extract significant insights, draw conclusions, and help in decision-making. The process involves employing computational and statistical methods to analyse extensive and elaborate datasets. Data analytics assists in getting information about customer behaviour, product data and much more.
Receipt scanning technology encourages businesses to successfully and accurately analyse their financial data in a more efficient manner. Through the data analysis method of receipt scanning, businesses can identify trends and patterns that may indicate fraudulent activity. This identification is easily done by analysing their financial data, thus helping businesses detect fraud before it causes any major issue.
Integration with accounting software is the process that involves connecting and sharing data among different software systems. For instance, business accounting software and other systems used for sales, operations, or customer management systems. This merging or integration enables automatic data transfer, reducing the necessity for reconciliation and manual data entry.
Integrating accounting software with other systems can serve several benefits to businesses. Automating procedures, cutting down on errors, and eliminating redundant data entry, can increase productivity. Also, it can give businesses real-time access to financial data to make decisions based on the most recent facts.
Receipt scanning technology is successfully integrated with accounting software. Integration helps to make tracking and handling financial transactions easier for businesses. Such integration also grants an additional layer of security by guaranteeing that all financial transactions are tracked and recorded.
Businesses need to be aware of all the different types of receipt fraudulent actions that might affect their finances to a great extent. It is wise to take a stride toward preventing such criminal acts. Businesses must train employees to detect and prevent fraud using receipt scanning solutions.