Developing A Fraud Detection System In NetSuite
Client Portfolio
A leading American business approached us with a serious concern involving internal fraud. They found that certain employees were tampering with the transaction records in NetSuite. They were specifically changing the unit prices approved by the higher management. Since these particular employees were responsible for handling various transactions, simply limiting their access was not a practical solution. The client needed a quick, effective solution to monitor and prevent the issue.
Let’s discuss in detail the implementation process with which we helped them achieve their objective. This article will help you get an insight into the benefits of creating a fraud detection system in NetSuite.
How Does ERP Help 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.
Problem Statement
The client needed a solution to instantly detect and monitor any unauthorized changes to transaction records in NetSuite. The primary concern was that employees were manipulating the unit price in sales orders, which could severely affect the company’s financial accuracy and integrity.
The price per unit as specified by the company in the item record is the “unit price” in a sales order. In a sales order, this value is automatically populated as per the configuration. Any mismanagement or violation of these records has a negative impact on the organization’s overall effort.
The client required a system that would notify them immediately if any changes or malpractice were made that deviated from the approved values.
What We Suggested
Our team at Jobin & Jismi proposed developing a fraud detection system using NetSuite’s advanced scripting capabilities. Our expert team at Jobin & Jismi suggested utilizing NetSuite’s advanced scripting capabilities to build a fraud detection system. Our goal was to develop a system by using SuiteScript to monitor changes in key transactional records and send out instant alerts to the higher authority as specified by the client for any suspicious activity.
Our proposed solution included:
• Triggering email notifications and dashboard alerts for higher management when any unauthorized changes were made.
• Tracking and logging changes in key fields, such as the unit price in sales orders, credit memos, invoices, and inventory adjustments.
• Monitoring a wide range of transactional records and ensuring real-time alerts for instant detection of fraud.
The following are the primary conditions in the process that trigger alerts:
- Bill Credit: actions such as moving, deleting, voiding, or altering the Bill Credit records
- Purchase Order: If someone makes any change in the value or deletes the value.
- Sales Order: Any unauthorized sales which are below-cost or of zero cost.
- Credit Memo: Should someone alter or remove any value from the Credit Memo
- Invoice: If an attempt is made to modify an item at a reduced price or delete an item.
- Inventory Movement: If there are malpractices in the Inventory transfer, modification, or adjustments made to the inventory.
- Payment Received: Any change, edit, or deletion in the payment received record.
Challenges
The primary challenge was identifying and isolating unauthorized changes without disrupting the regular tasks of the employees. We had to create a system that could monitor records in real time yet remain unobtrusive.
Additionally, we needed to ensure that the system could handle complex conditions and provide accurate alerts for specific triggers, such as changes in sales orders, credit memos, or inventory movements.
Customer Success
Our team was able to successfully develop a fraud detection system that was tailored to the needs of the client. The system would monitor key transaction records and provide real-time alerts every time an unauthorized change was detected. This provided the client with complete visibility into the transactional processes.
Hence, the system dramatically reduced inconsistencies in sales orders and provided the customer with a reliable mechanism for identifying fraud. This also allowed the organization to maintain line-level visibility in every transaction such that all procedures remained transparent and accountable.
- Developed a fraud detection system that provides real-time alerts for unauthorized modifications in the NetSuite transaction records.
- Activated alerts based on certain conditions, such as unit price change.
- The system helped the client save up to USD 3,000 per month by preventing fraudulent activities.
- There is no scope for fraudulent behavior as the system is giving full visibility of all transactions.
Way Forward
The fraud detection system has been very effective for the client, giving them a sense of relief and immense cost savings. Moving forward, we recommend expanding this system to cover more aspects of the client’s business operations, for example, developing it to expand on other types of fraud that need to be monitored. This will further solidify their entire business operations while improving security.
If your organization is facing similar issues, Jobin & Jismi has the expertise to help you. Contact us today to learn more about our NetSuite solutions.
