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Vendor Risk Management

May 3rd, 2023
by Tony.
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Many organisations have fallen victim to unforeseen supply-chain disruptions and vulnerabilities in the last decade. If a business can identify and mitigate Vendor risks effectively, it can ensure a smooth supply-chain management system and evade substantial losses that such events may trigger. This article will debate how a business can identify Vendor risks and alleviate their effects before any damage is done.


What is Vendor Risk Management?
Vendor risk management is a methodical approach to identifying, assessing, and mitigating any risk to supply chain management that may arise from the actions of the Vendor.


How to identify Vendor Risks
If an organisation wants to quantify risks, the ideal way to do so is by classifying them into two groups:

Known and Unknown Risks.
Unknown risks are the ones that are almost impossible to foresee. For example, a tornado destroying your Vendor’s warehouse can negatively impact your supply chain, and it’s hard to predict the intensity of a natural calamity until after it has occurred. In the same way, a cybersecurity vulnerability buried deep inside a critical electronic component of the Vendor’s system can shut down its operations without warning.

When handling unknown risks, the best strategy is to reduce their probability and increase your response time to maintain a competitive advantage.

Known risks can be recognized and measured- this means they can be managed over time. For example, Vendor bankruptcy is a known risk that can disrupt the supply chain. A business can assess its likelihood by analyzing the Vendor’s financial history and credit rating.
Similarly, cybersecurity breaches are newer risks that can be quantified by analyzing a Vendor’s IT system.

How can you manage unknown vendor risks?
Alleviating unknown risks is achievable by setting up robust defenses and building a risk-aware organisational culture. A strong culture ensures that defensive layers are in place to respond quickly when an unknown risk materializes and threatens to disrupt operations.

How can you manage known vendor risks?
Organisations can use a structured problem-solving procedure to manage their known risks effectively.

⦁ The first step is to map out and evaluate the supply chain of your products. Each Vendor in the supply chain should be identified, along with the risks to which they expose your business.
⦁ Regular monitoring of the framework is a critical success factor in Vendor risk management. An early warning system should be set in place to track top risks.
⦁ Constantly improve the agility and resilience of the supply chain.
⦁ Build a Vendor risk management framework where each risk is scored according to its impact, likelihood, and the organisation’s preparedness to handle it.

Finally…
As supply chains become more global, the risk associated with Vendors multiplies.

Organisations must map out a systematic approach for Vendor risk management to avoid losses and ensure smooth operations.

For more info please go to: https://fiscaltec.com/supplier-risk-management/

Minimise Duplicate Payments Risk with software from Fiscal Technologies

Apr 15th, 2018
by Anna.
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As with every step forward and with the crossing of each new frontier, the constant development of business and the constant development of accounting technology and multiplication of business models and practices presents firms with new challenges and new problems. Your Accounts Payable department is now a hugely more complex beast than its predecessors of even a decade ago were: and it is charged with burdensome and serious new responsibilities. What’s more, any increase in the size of your AP department, let alone in its complexity, inevitably opens the door to an increased threat of faults: and they can add up. The new complexity and diversity of the ways in which AP departments receive payments has created mind-boggling new tasks and this means new dangers of things falling between the cracks. In a more complex, modern department, old problems like fraud, duplicate payments and overpayment still loom large, but in new ways

Rubbing out everyday errors like duplicate payments, faulty procedures or even failures to get the most out of the programmes that you use demands proactive self-auditing. In order to really get to grips with the challenges of a modern and expanding AP operation, you need an excellent Accounts Payable audit system. That’s where Fiscal Technologies AP Forensics software service comes in. AP Forensics is an easy-to-use system which can give you an oversight of your whole AP operation from A to Z.

The technology choices that businesses make are now crucial to the success of your accounts payable audit operation. The recovery audit software that you use has to be absolutely top of the range or else it is simply useless. Fiscal Technologies accounts payable audit software package AP Forensics falls firmly into the former category. One of AP Forensics greatest virtues is its simplicity. The system is designed to be as straightforward and intuitive for AP professionals as possible, so that information gleaned from your AP Forensics audit can be quickly converted into effective corrective action.

Accounts Payable Audit software isn’t the only important weapon in Fiscal Technologies armoury. Recovery audit software, designed to assist with recovery of money lost through overpayments or other errors which are detected after the transaction has been completed, is a vital tool: AP Forensics has the software solutions that are needed for effective recovery audits, as well as audits of your AP department’s procedures.

Fiscal Technologies’ decade of experience in the AP field points to the fact that if your staff are not adequately motivated; or if they are not suitably prepared for the fast pace of technological and organisational change, then even the most well-meaning management strategies for improving AP will leave your team feeling shell-shocked rather than empowered. AP Forensics is the software package that you need that can deliver the clear information and hard facts that AP teams require to navigate their way confidently through the changing AP environment.

Please visit http://www.fiscaltec.com/uk

Accounts payable audit can significantly reduce costs

Sep 4th, 2010
by Tony.
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Every big company with significant numbers of clients and employees will know that accounts can be complex and problematic. That’s why an accounts payable audit is necessary at least once a year. Such an audit will enable you to pinpoint any errors in your accounting processes, one of the most common – and costly – of which will be duplicate payments. These can be easy to make, often through simple human error. However, they can also be tricky to detect and address, and the longer the situation has been left, the harder it can be to rectify. Recovery audit software can make the process easier by automating it, leaving your staff to do what they do best.

One survey found that the impact of duplicate payments alone accounted for between 0.1 and 0.5 percent of company spending – not profit, spending, since these figures are about what is going out of your accounts. A company spending £50 million could easily expect to be losing £50,000, and very probably much more. And that’s just one type of overpayment. It’s likely that one in every thousand payments for your company is a duplicate. That all stacks up, and yet you may not notice it until a supplier lets you know – assuming they notice themselves, or want to tell you. And, of course, once a supplier goes out of business – not a rare thing in this economic climate – any chance of retrieving that overpayment goes out of the window.

Some businesses hire recovery auditors to do similar work for them. Whilst valuable in tracking down problems, these individuals charge expensive fees. It also places control for your accounts auditing outside your own company, rather than within your accounts department – surely a second best solution. Acquiring the right software can empower your own staff to find errors before they occur, and while there is still a good chance of fixing them.

These tend to be perennial and often costly problems. Recovery audit software can almost entirely eliminate the problems of duplicate payments, other overpayments and further accounting errors, from the simple human error side of things to the more subtle and sinister side of supplier fraud. It makes the yearly (if that) accounts payable audit process painless and easy, giving the initiative back to your own company rather than outside agencies.

Please visit http://www.fiscaltechnologies.com/ for further information about this topic.

http://www.fiscaltechnologies.com/

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