Accounts payable fraud usually begins with something ordinary. An invoice comes into the email. Someone gives it approval. Money is taken from the bank. No one pays attention because the payment seems normal.
That’s why fraud can stay hidden for many months. The person doing it doesn’t always need to hack into anything. Sometimes they just need access to a vendor record or a process that no one checks carefully.
Where Accounts Payable Fraud Usually Starts
Fake vendors are an issue. An employee creates a vendor that looks real then sends payments to an account they own. The amounts might be small at first because small payments don’t catch attention.
Duplicate invoices work in a way. The same bill gets entered twice with a slightly different invoice number. If the system and the person reviewing it don’t notice the company ends up paying for the thing twice.
Look at the Vendor File
• A new vendor with a payment request needs more attention especially if no one on the purchasing side knows the name.
• Changes to bank details are a warning sign. They should be checked using a trusted contact method of the email that asked for the change.
• Duplicate invoices often appear in view because the amount feels normal which is exactly when reviewers tend to move on.
The Controls That Really Work
Good controls don’t have to make every payment complicated. The key is to divide responsibilities so one person can’t create a vendor and then approve that vendors payment without someone else noticing.
Access should follow the idea. People need access to do their job. They don’t need to have access to everything.
A accounts payable process usually includes approval limits in the workflow. Payments over an amount should get another check. Changes to vendor banking details should require verification. Payment records should also be compared to the purchase or service.
Don’t Forget the Simple Checks
Automated matching is helpful here. When an invoice matches an approved purchase order and the related receipt the payment feels faster because fewer routine decisions end up on someones desk.. Exceptions still need someone to look at them.
Regular reviews of vendors are important too. Look for suppliers with payment habits or long periods without any activity. A vendor that has been quiet and then gets a big payment needs attention.
Fraud Prevention Needs a Little Resistance
Honestly the best accounts payable controls aren’t the ones that make employees go through a lot of steps. They’re the ones that add resistance where fraud could slip through.
Keep vendor creation separate, from payment approval. Check changes on your own. Look at exceptions of just letting them go because the invoice looks familiar.
Train people to question urgency. “Please pay this today” should never be taken as proof that something’s real.