Fraud in accounts payable (AP) is a persistent and evolving challenge, with cybercriminals and internal bad actors constantly finding new ways to exploit vulnerabilities. A recent webinar featuring insights from the Finance Leaders Fraud Report uncovered the latest risks, industry best practices, and the role technology plays in protecting businesses.
As organizations process thousands of invoices each month, fraudsters are adapting, using sophisticated phishing scams, fake invoices, and even AI-generated fraud attempts. The discussion revealed three core areas where businesses are most vulnerable—external threats, internal fraud, and outdated systems that fail to prevent attacks.
And don’t forget to download the 2024 Finance Leader’s Fraud Report.
Fraud Is More Common Than You Think
A staggering 65% of businesses have either experienced fraud or know someone who has in the past five years. Yet, many companies still struggle to openly discuss these incidents, often due to reputational concerns. This silence creates a false sense of security, allowing fraud to remain undetected and unaddressed for longer periods.
One of the most dangerous aspects of fraud is how easily it can occur. A convincing email from a trusted supplier, a slightly altered invoice, or a well-timed urgent payment request can easily slip through the cracks—especially in fast-moving AP departments. With AI-generated scams on the rise, companies must rethink their fraud prevention strategies before it’s too late.
“Fraud is happening everywhere, but companies still hesitate to talk about it. That’s part of the problem.”
The Invisible Threat: Internal Fraud
While external fraud—like phishing emails and fake invoices—gets most of the attention, internal fraud is just as dangerous. Employees who exploit gaps in segregation of duties or manipulate approvals can cause just as much damage as an external attack.
Many AP professionals are in junior roles, and often hesitant to challenge suspicious payments. However, fraud prevention isn’t just about catching external threats—it’s about creating a culture where employees feel empowered to question anything that seems off.
“The hardest fraud to talk about is the kind happening inside your own organization.”
Where Technology Fails and Succeeds
Despite fraud risks increasing every year, 35% of businesses still don’t use any kind of fraud detection technology. Many rely solely on manual reviews, which are both time-consuming and prone to human error. This is where AI-powered fraud detection tools are stepping in.
New advancements in real-time bank account verification, invoice anomaly detection, and AI-driven document analysis are changing how fraud is caught. These tools can instantly flag:
- Invoices with altered details (e.g., an edited logo, mismatched bank details)
- Duplicate payments that slip through approval workflows
- Unusual transaction patterns that indicate fraud attempts
One of the biggest developments is instant bank account ownership verification—ensuring that the name on the bank account matches the legal business name before payments go through. This alone could prevent millions in fraudulent transactions.
Simple Actions That Prevent Major Losses
Technology is powerful, but sometimes, the simplest actions can prevent the biggest losses. Incredibly, only 57% of AP teams make a phone call to confirm bank account changes before processing a payment.
One real-world example involved a fraudster hacking a supplier’s email and sending a fake bank details update. The invoice looked legitimate in every way—it had the correct business registration, financial director’s signature, and formatting. Without verification, the company was on the verge of wiring $2 million to a scammer.
It was only because an AP manager called the known contact number on file (not the one in the email) that the fraud was caught. Simple, but effective.
The Future of AP Fraud Prevention
Fraudsters are evolving—and fast. AI-powered scams, deepfake impersonations, and business email takeovers are becoming more common. The next five years will see rapid innovation in fraud prevention, with technology advancing 10x faster than it has in the past decade.
But technology alone isn’t the solution. Businesses must:
✔️ Invest in fraud detection software—relying on manual processes is no longer an option.
✔️ Prioritize AP training—only 31% of teams receive formal fraud training, leaving a massive knowledge gap.
✔️ Establish a culture of verification—encourage AP professionals to question transactions without fear.
✔️ Rethink fraud budgets—fraud prevention should be treated like IT security, with dedicated funding and proactive strategies.
Final Thoughts
Fraud prevention requires a blend of technology, training, and cultural shifts within finance teams. The good news is that the tools to fight fraud are getting smarter. The challenge now is how quickly businesses are willing to adapt. Fraudsters aren’t waiting, so neither should you.
