Heightened geopolitical tension in 2024 will result in rising invoice fraud

Rising geopolitical tension in 2024 will drive an increasing number of cyber attacks on businesses, and invoice fraud will be an increasingly common attack method. Threat actors are already targeting businesses – the HISCOX Cyber Readiness Report found invoice fraud was one of the most common threats in 2023. Next year, this trend will continue as fraudsters use geopolitical uncertainty as a cover for criminal activity.

The rise of invoice fraud will prompt closer collaboration between finance and security teams. To help this collaboration, businesses should take steps such as implementing AI and automation tools to detect any suspicious activities or anomalies within the Accounts Payable (AP) process. For example, machine learning algorithms can identify sudden changes to bank account details; tell-tale signs of counterfeit invoices; or any discrepancies in PO or invoice numbers. Given the importance of a company’s cashflow, it is imperative finance and cyber teams work together to stop fraudsters in their tracks.

In 2024, the Prompt Payment Code will get tougher to address the payment power dynamic between small and large businesses

By Sarah-Jayne Martin Director, ICA Global AR Practice at Quadient Accounts Receivable

In 2023, the government’s review of the Prompt Payment Code was a positive move towards addressing the power balance of late payments. But in 2024, we will see much stronger industry and government action to enforce a permanent shift to on-time payments. Real, tangible action is needed to tackle late payments as the cost-of-living crisis continues.

Over the next year, the government will take both carrot and stick approaches to reward those businesses who pay on time and ensure there are serious consequences for those who don’t. The industry will likely see more legislation to clearly enshrine payment obligations. For instance, only allowing companies who have signed up to the Code to bid for government contracts, or fining those who don’t comply with payment regulations.

Tackling the late payment crisis will depend on businesses’ ability to adopt technologies that make on-time payments easier. In the coming 12 months, the government needs to encourage and accelerate this adoption. For instance by offering tax incentives on automation innovations that speed up the entire payments cycle. It’s imperative 2024 is the year of real change in payment behaviours, or it is SMEs that will suffer.

In 2024, businesses will expect the convenience of B2C experiences in B2B, causing a shift in payment options

By Sarah-Jayne Martin, ICA Global AR Practice at Quadient Accounts Receivable.

In the age of next day delivery, we expect instant gratification with every transaction and purchase. This level of convenience has long been available in B2C experiences with contactless payments and online shopping, but B2B has been slow to adapt. In 2024, businesses will start to expect the ease of B2C experiences in B2B, driving a shift in payment options and accelerating digital transformation.

As decision makers and business leaders start coming from younger demographics, it will no longer be acceptable to have to write a cheque or wait days for payments to clear. Over the coming year, we’ll see businesses implement new payment options like allowing customers to pay bills via their phone or through apps. Eventually B2B will be aligned with B2C, offering seamless payment experiences such as text-to-pay. Those businesses who don’t start to digitally transform their payment processes in 2024 will quickly get left behind.

Data is already king, but in 2024 businesses will leverage crowdsourced data to improve predictive analytics

By Sarah-Jayne Martin Director, ICA Global AR Practice at Quadient Accounts Receivable.

Intelligent insights into customer behaviour have long been essential to success. In 2024 as the need to personalise continues, organisations will explore new sources to further enhance their understanding of customers. Over the next year, businesses will leverage crowdsourced data, using third parties to gather large amounts of data on shared customers or certain personas. For the finance function, accessing this information is vital for gaining a better insight into customer payment behaviours. This knowledge will allow finance teams to track if certain groups or customers have slowed down their payments and anticipate changes to their cash flow. Finance and business leaders can then work together to change payment terms to support loyal customers in hard times or protect themselves from late payments.

But no matter how much data organisations have, if they cannot intelligently analyse and manage it, that data becomes useless. So in 2024, it’s vital that finance teams prioritise adopting technology that derives meaningful and actionable insights from data. AI and automation are already widely used by finance teams to reduce manual toil, but over the next year predictive analytics and generative AI will become essential tools. These solutions will help finance teams uplevel their understanding of how economic circumstances are impacting customers and start proactively protecting their cash flow.

In 2024, global regulations on unfair payment practices and e-invoicing will force unprecedented transformation in the finance function.

By Valerie Mazzoni-Colin, VP Global Product Marketing, Finance and Document Automation at Quadient Accounts Payable.

In 2024, a shakeup in the financial landscape will cause unprecedented rates of digital transformation. New global e-invoicing mandates and harsher enforcement of the Prompt Payment Code will force UK organisations to embrace technologies such as automation, generative AI, and machine learning within their finance functions.

Enterprises have long understood the benefits of transforming the finance function but have lacked the urgency and means to do it. This reluctance stems from the complexity traditionally involved with onboarding new digital solutions and technologies. Many organisations rely on outdated systems or even siloed manual processes, that require a great deal of expense, knowledge, and time to make any changes. However, the advent of cloud services has severely reduced the complexity and costs involved with implementing effective digital change. As a result, next year will see the urgent need for digital transformation met with the ability to quickly implement it. While the move towards e-invoicing is driving the transformation of finance processes, businesses that realise the true potential of the finance team will be those that succeed in the coming year.

Improved supplier collaboration will be a top priority in 2024.

By Karim Ben-Jaafar, Senior Vice President at Quadient Accounts Payable.

With economic uncertainty set to continue in 2024, organisations will realise the need to deepen their relationship with their suppliers. Ongoing issues with supply chain resilience mean suppliers have significant bargaining power, as buyers can’t risk losing them. But with the prospect of economic turbulence threatening everyone, suppliers and buyers need to develop a symbiotic relationship. This will ensure a more productive partnership for the long term – if both sides can collaborate effectively.

Accounts Payable (AP) teams have a crucial role to play in improving this relationship. Recent research of AP professionals illustrates that supplier management skills are critical to businesses’ success. To deepen the relationship with suppliers, AP teams must improve their collaboration and communication. For instance, by working more closely to resolve any invoicing disputes or proactively communicating when the organisation may struggle to make a payment on time. Better collaboration with suppliers can ultimately result in more flexible payment terms to reward continued business. Suppliers and buyers will develop a synergy in 2024 that benefits not only themselves, but the wider ecosystem around them.

Quadient will be exhibiting at Accountex London on 15-16 May 2024 at ExCel London. Join the mailing list to be notified when free registration opens, here.

The post Heightened geopolitical tension in 2024 will result in rising invoice fraud appeared first on Accounting Insight News.