Developing A Fraud Detection System In NetSuite

How ERP helps fight Fraud?

ERP is a readily available technology that is capable of handling multiple levels of fraud.   

Prevention is at the core of ERP systems. They provide a 360° approach and provide insights into everyday operations. Opportunists are likely to shy away from these air-tight procedures and risk direct exposure.   

Automation is another way to fight fraud and ERPs maintain a clear audit trail, unlike manual systems. Also, these systems can have various types of approval mechanisms and alerts built into them.  

Advanced segregation is another key feature that makes ERP stand out in fraud detection. It is hard for fraudsters to tamper with a system having end-to-end control and stringent approval mechanisms.  

Role-based security is another great mechanism in ERP. It helps in controlling and setting limits for employees based on their processes and job role. This will prevent them from looking into sensitive areas and loopholes in the business process.   

Requirements

The organization wanted a solution to monitor changes in transaction records instantly. They wanted to keep track of unauthorized changes.     

For instance, the “unit price” in a sales order is the price per unit as defined by the firm in the item record. This is an automatically populated value in a Sales order as per the configuration.   

Any mismanagement or violation in these records adversely affects the collective effort taken by the organization. Our client required a system that can instantly notify them in case of any malpractice.

Solution 

Developers at Jobin & Jismi solved the crisis by designing a fraud detection system. They used suite scripts to check and report higher officials. They did this by triggering an email and a dashboard alert.  

This took place during the generation of a transactional record. It also happens while updating it to a rate less than the item record unit price. By doing so, they can conduct close monitoring of those employees.    

Our professionals developed a functionality that detects unauthorized changes in transactional record fields. This helps the recording of a new entry in the system. The system also sends a notification to the selected recipients regarding the new edit or entry.  

The system sends it both as mail and dashboard alert.This acts as a quick detection system against fraudulent activities.

The primary conditions in the process that trigger alert are the following; 

1. Bill Credit: Any actions like move, delete or void, or alter the Bill Credit records

2. Purchase Order: If someone makes any change in the value or deletes the value.

3. Sales Order: Any unauthorized sales which is below-cost or zero cost.

4. Credit Memo: If anyone changes or deletes the value in the Credit memo

5. Invoice: If someone attempts to change or delete an item at a low costange or delete an item in low cost.

6. Inventory Movement: If there are malpractices in the Inventory transfer or adjustment or changes.

7. Payment received: Any Change, edit, or deletion in the payment received record.

Result 

As a result, the sales order discrepancies came to an end and the client had an effective fraud detection system in place. They now have line-level visibility over each of their transactions thus leaving no room for doubt. The final result was that the company was able to save up to USD3000 per month.   

Make an appointment with our experts at Jobin & Jismi if your organization faces similar challenges.