Fraud prevention using WebXpress TMS
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The document discusses features of the WebXpress fraud management solution and suggested processes to prevent fraud and leakage in the Indian logistics sector. It provides examples of common fraud like underreporting load weights, using market vehicles instead of own vehicles, and reporting higher market rates. It then explains how WebXpress helps by enabling random weight checks, GPS tracking of vehicles, approved rate settings, and ensuring unique challans cannot be reused. The document also discusses leakages from late or non-billing, rejection of incorrect bills, and not recovering valid deductions, and how WebXpress features like automatic billing and contract enforcement can help address these.
Fraud prevention using WebXpress TMS
- 1. Solution Features and Suggested Processes Fraud Management @ WebXpress
- 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 CASH TRANSACTIONS- that is approximate USD 20-28 bn or Rs. 100,000 Cr to Rs. 150,000 Cr. In CASH As per Transparency International, over 22000 Cr. of bribes are paid by transporters 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 prevent some of the frauds and put in place processes to ensure accountability of transactions WebXpress does not claim to solve the gargantuan problem of corruption in the sector- but can help its customer protect themselves to best possible extent
- 3. Transportation- riven with corruption
- 4. 20% of working time spent in paying bribes
- 5. Fraud Examples- Never told, never heard
- 6. It could happen to you !! • A leading courier company recently found that over Rs. 70 lakh worth of To Pay and Paid cash was never submitted to company and was pocketed by employees • An express cargo company found that a bets performing region was actually making ghost booking and deploying ghost vehicles with real money taken from HQ • A fleet company found that their vehicles in return journey were showing very low yield but were actually full of goods of outsiders • A parcel company in India’s hinterland found that employees were collecting more amount than reported and were reporting gap as customer deduction • Many such examples are bound and India is not alone in such cases. Here is a report from PWC showcasing global fraud in Transportation Industry:
- 7. How WebXpress Prevent Fraud?
- 8. How WebXpress prevents fraud Fraud Description How WebXpress helps Under reporting of load Booking clerk will report weight as 400 Kg when it is actually 600 Kg. 200 Kg. moves free at company expense and booking clerk gets a tip from customer • Random check of arrived consignments for weight and volume • Report DEPS in case of gap and system will raise a TICKET • Analysis of tickets will help to find branches with maximum issues Market vehicle in place of own vehicle Branch places market vehicle even when own vehicle is available. Branch gets a cut from market vendor. • GPS on own vehicles will show where they were at the time of placement • Job sheet will show whether vehicles were actually under maintenance Market rate higher than actual Branch places vehicle at rate higher than available in market and pockets the difference • Use WebXpress TAM module to approve every placement • TAM will show past tend of rates for same lane • Also, random calls to market brokers will provide real rate
- 9. How WebXpress prevents fraud Fraud Description How WebXpress helps Extra placement Branch places more vehicles than required stating more stock or urgent service request. • Monitor vehicle load factor and raise alert for low load factor • Work out schedule of vehicle placement and block a schedule once used Ghost vehicles No vehicle is places and dummy documents are created • Insist on system generated Challans. • They require system entry of LR and LR requires real load. • Do not allow same vehicle number once used till the time it is freed at another location Multiple payments for same vehicle Vendor submit same challans multiple times over time and get payments • Vendor bill is booked in system before payment • WebXpress never allows same challan to be booked more than once- EVER
- 10. How WebXpress prevents fraud Fraud Description How WebXpress helps Request for more cash than needed Branch asks for cash for expense on advance, conveyance, office expense etc. even when they have cash in hand • WebXpress provides ONLINE view of CBS of each branch and also of collection outstanding • Branches will get advance based only on online balance. If branch has not updated system, more cash will show Late collection or non reporting of paid and to pay Branch does not collect payments in time. Or it actually collects but does not report. • Paid and To Pay outstanding reports will help HO focus on collections • Daily SMS alert can be sent to branches for collection of outstanding Wrong reporting of deductions for cash collection Branch collects Rs. 3000 but reports only Rs. 2500 were collected and show gap as deduction • Send SMS/ e-mail to customer stating collection and deduction amount • Also send help line number if he feels wrong data is sent • This will ensure HO will know wrong deduction as customer will not accept wrong data
- 11. How WebXpress Prevents leakages?
- 12. Leakages • Not all loss is dues to frauds, a much larger amount of loss is due to leakages and inefficiency of operations • WebXpress can be used to build practices that will prevent or reduce many of these leakages • Needless to say that organizational practices need to be aligned with WebXpress system for best results
- 13. Prevention of Leakages Leakage Description How WebXpress helps Late billing LR remains unbilled for a long time due to various reasons- POD non arrival, comments by customers, large volume etc. • WebXpress can be used to scan POD and start audit as soon as delivery is completed • PODs that are audited can be parked as APPROVED FOR BILLING • Thus, bill can be expedited quickly and bills submitted once PODs arrive Late submission Bills are sent to branch but not submitted to customer in time • WebXpress can be used to note submission details. It can then be used to track unsubmitted bills • Also, bill acknowledgements can be forwarded with a scanned copy • Electronic bills can be submitted to customers where acceptable Bill rejection Bills are rejected by customer due to wrong contract details, wrong rates. Many a times contract is revised but bill is made with old rates • All contracts can be entered in system and LR can get rates automatically. If contract is expired, LR can not be made • This will ensure that bills are correct and rejection is minimized
- 14. Prevention of Leakages Leakage Description How WebXpress helps Recovery of deduction s Customer provides details of deduction quite late. If the same is not investigated, it can happen that wrong deductions are made • WebXpress recovery module tracks every deduction against every LR • This also helps customer work with customer and recover amounts where possible • This can be recorded against the LRs • Also deduction by customer can be recovered from vendors or employees Rate enforcement Users enter the rate as they see fit to get business from customer. This results in loss to company • Standard contracts, yield limits, minimum charges, weight etc. can be entered in WebXpress system • LR entry can then be done only in accordance with contracts or standard rates. This will ensure minimum business for company at no loss Last mile cost control Delivery to customer premises from hub is last mile delivery. Many a times delivery cost per Kg is much higher • WebXpress can be used to focus on pick up and delivery cost per Kg. • This will help to ensure that there is no excess payment in last mile
- 15. Prevention of Leakages Fraud Description How WebXpress helps Vehicle Underutilization Branch/ Hub places vehicle with less than optimum load due to “operational reasons” • A rule can be set that any vehicle must be utilized to say at least 70% of capacity, else approval needs to be granted • Cost per KGKM rule- the cost and load in vehicle should be such that it meets cost per KGKM criteria protecting margins Underutilized route segments In a multi-point route, a particular segment is run less than optimum • WebXpress route analysis can help to monitor trend in segment wise usage of a route
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