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Fraud prevention using WebXpress TMS


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Fraud prevention using WebXpress TMS

  1. 1. Solution Features and Suggested ProcessesFraud Management @WebXpress
  2. 2. Background Indian Logistics sector is worth USD 100 bn Road Transportation alone accounts for more than 50% of logistics spend Over 50% to 70% payments for transportation movement is in CASHTRANSACTIONS- that is approximate USD 20-28 bn or Rs. 100,000 Cr toRs. 150,000 Cr. In CASH As per Transparency International, over 22000 Cr. of bribes are paid bytransporters on Indian highways every year Thus, the sectors is highly prone to frauds and leakages This presentation outline some of the methods used by employees/vendors/ customers to defraud transportation companies The presentation also discusses role of WebXpress Solution to preventsome of the frauds and put in place processes to ensure accountability oftransactions WebXpress does not claim to solve the gargantuan problem of corruption inthe sector- but can help its customer protect themselves to best possibleextent
  3. 3. Transportation- riven with corruption
  4. 4. 20% of working time spent in paying bribes
  5. 5. Fraud Examples- Never told, never heard
  6. 6. It could happen to you !!• A leading courier company recently found that over Rs. 70 lakh worth of ToPay and Paid cash was never submitted to company and was pocketed byemployees• An express cargo company found that a bets performing region was actuallymaking ghost booking and deploying ghost vehicles with real money takenfrom HQ• A fleet company found that their vehicles in return journey were showingvery low yield but were actually full of goods of outsiders• A parcel company in India’s hinterland found that employees were collectingmore amount than reported and were reporting gap as customer deduction• Many such examples are bound and India is not alone in such cases. Hereis a report from PWC showcasing global fraud in Transportation Industry:
  7. 7. How WebXpress Prevent Fraud?
  8. 8. How WebXpress prevents fraudFraud Description How WebXpress helpsUnder reporting ofloadBooking clerk will reportweight as 400 Kg when it isactually 600 Kg. 200 Kg.moves free at companyexpense and booking clerkgets a tip from customer• Random check of arrived consignments forweight and volume• Report DEPS in case of gap and system willraise a TICKET• Analysis of tickets will help to find brancheswith maximum issuesMarket vehicle inplace of ownvehicleBranch places market vehicleeven when own vehicle isavailable. Branch gets a cutfrom market vendor.• GPS on own vehicles will show where theywere at the time of placement• Job sheet will show whether vehicles wereactually under maintenanceMarket rate higherthan actualBranch places vehicle at ratehigher than available in marketand pockets the difference• Use WebXpress TAM module to approve everyplacement• TAM will show past tend of rates for same lane• Also, random calls to market brokers willprovide real rate
  9. 9. How WebXpress prevents fraudFraud Description How WebXpress helpsExtra placement Branch places more vehiclesthan required stating morestock or urgent service request.• Monitor vehicle load factor and raise alert for lowload factor• Work out schedule of vehicle placement andblock a schedule once usedGhost vehicles No vehicle is places and dummydocuments are created• Insist on system generated Challans.• They require system entry of LR and LR requiresreal load.• Do not allow same vehicle number once used tillthe time it is freed at another locationMultiple paymentsfor same vehicleVendor submit same challansmultiple times over time andget payments• Vendor bill is booked in system before payment• WebXpress never allows same challan to bebooked more than once- EVER
  10. 10. How WebXpress prevents fraudFraud Description How WebXpress helpsRequest for morecash than neededBranch asks for cash for expenseon advance, conveyance, officeexpense etc. even when they havecash in hand• WebXpress provides ONLINE view of CBS ofeach branch and also of collectionoutstanding• Branches will get advance based only ononline balance. If branch has not updatedsystem, more cash will showLate collection ornon reporting ofpaid and to payBranch does not collect paymentsin time. Or it actually collects butdoes not report.• Paid and To Pay outstanding reports will helpHO focus on collections• Daily SMS alert can be sent to branches forcollection of outstandingWrong reporting ofdeductions forcash collectionBranch collects Rs. 3000 butreports only Rs. 2500 werecollected and show gap asdeduction• Send SMS/ e-mail to customer statingcollection and deduction amount• Also send help line number if he feels wrongdata is sent• This will ensure HO will know wrongdeduction as customer will not accept wrongdata
  11. 11. How WebXpress Prevents leakages?
  12. 12. Leakages• Not all loss is dues to frauds, a much larger amount ofloss is due to leakages and inefficiency of operations• WebXpress can be used to build practices that willprevent or reduce many of these leakages• Needless to say that organizational practices need to bealigned with WebXpress system for best results
  13. 13. Prevention of LeakagesLeakage Description How WebXpress helpsLate billing LR remains unbilled for a longtime due to various reasons-POD non arrival, comments bycustomers, large volume etc.• WebXpress can be used to scan POD and startaudit as soon as delivery is completed• PODs that are audited can be parked asAPPROVED FOR BILLING• Thus, bill can be expedited quickly and billssubmitted once PODs arriveLate submission Bills are sent to branch but notsubmitted to customer in time• WebXpress can be used to note submissiondetails. It can then be used to trackunsubmitted bills• Also, bill acknowledgements can be forwardedwith a scanned copy• Electronic bills can be submitted to customerswhere acceptableBill rejection Bills are rejected by customerdue to wrong contract details,wrong rates. Many a timescontract is revised but bill ismade with old rates• All contracts can be entered in system and LRcan get rates automatically. If contract isexpired, LR can not be made• This will ensure that bills are correct andrejection is minimized
  14. 14. Prevention of LeakagesLeakage Description How WebXpress helpsRecovery ofdeduction sCustomer provides details ofdeduction quite late. If thesame is not investigated, itcan happen that wrongdeductions are made• WebXpress recovery module tracks everydeduction against every LR• This also helps customer work with customerand recover amounts where possible• This can be recorded against the LRs• Also deduction by customer can be recoveredfrom vendors or employeesRate enforcement Users enter the rate as theysee fit to get business fromcustomer. This results in lossto company• Standard contracts, yield limits, minimumcharges, weight etc. can be entered inWebXpress system• LR entry can then be done only in accordancewith contracts or standard rates. This willensure minimum business for company at nolossLast mile costcontrolDelivery to customer premisesfrom hub is last mile delivery.Many a times delivery cost perKg is much higher• WebXpress can be used to focus on pick upand delivery cost per Kg.• This will help to ensure that there is no excesspayment in last mile
  15. 15. Prevention of LeakagesFraud Description How WebXpress helpsVehicleUnderutilizationBranch/ Hub places vehicle with lessthan optimum load due to“operational reasons”• A rule can be set that any vehiclemust be utilized to say at least 70%of capacity, else approval needs to begranted• Cost per KGKM rule- the cost and loadin vehicle should be such that it meetscost per KGKM criteria protectingmarginsUnderutilizedroute segmentsIn a multi-point route, a particularsegment is run less than optimum• WebXpress route analysis can help tomonitor trend in segment wise usageof a route
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