Is your factory leaking money? 5 fraud prevention ways with SYSPRO

It's International Fraud Awareness Week and fraud prevention capabilities should be on your evaluation checklist.

Manufacturing fraud doesn't just happen in finance, it occurs in procurement, inventory management, and on the production floor. Disconnected systems create the gaps where fraud thrives. An integrated ERP eliminates those gaps.

1. Procurement fraud prevention

The risk: A single employee creates fake vendors and approves fraudulent payments.

SYSPRO solution: Role-based security enforces separation of duties. One user cannot both create a supplier and approve their invoice. The system also detects and flags duplicate payments before processing.

ERP feature: Multi-level approval workflows, vendor master controls, duplicate invoice detection.

2. Inventory theft and shrinkage control

The risk: Untracked inventory movements allow theft masked as "shrinkage."

SYSPRO solution: Complete traceability from goods receipt through production to finished goods. Every movement requires a transaction. Unexplained variances trigger immediate alerts.

ERP feature: Goods Received Notes (GRN), lot and serial tracking, inventory variance reporting, and real-time stock visibility.

3. Bill of materials (BOM) security

The risk: Unauthorised material substitution, replacing specified materials with cheaper, non-compliant alternatives to pocket the cost difference.

SYSPRO solution: BOM lockdown with change control. Material substitutions require authorisation and create an audit trail. Quality standards are enforced at the system level.

ERP feature: BOM version control, engineering change orders (ECO), material compliance tracking.

4. Payroll fraud elimination

The risk: Ghost employees or inflated hours on timesheets.

SYSPRO solution: Shop floor data capture integration matches payroll hours against actual logged production time. Hours not tied to real production work are flagged automatically.

ERP feature: Time and attendance integration, job costing validation, labour variance analysis.

5. Scrap and rework management

The risk: Good inventory fraudulently written off as "scrap" and removed from the facility.

SYSPRO solution: Mandatory reason codes for all scrap transactions. The system creates a complete audit trail and highlights unusual patterns through exception reporting.

ERP feature: Scrap reason codes, scrap analytics, manufacturing variance reporting, and audit trails.

Why this matters for ERP selection

Fraud prevention in manufacturing requires operational and financial controls working together in one system. SYSPRO provides:

• Integrated architecture connecting procurement, inventory, production, and finance

• Enforced separation of duties at the system level

• Complete audit trails for every transaction

• Real-time visibility into physical and financial processes

• Automated controls that don't rely on manual oversight

Manufacturing fraud costs businesses globally millions annually. The right ERP doesn't just improve efficiency; it protects your bottom line.

Evaluating ERP systems? Contact TecOpti to see how SYSPRO's integrated controls secure your manufacturing operation from procurement to production.