Accounts payable teams move money every day, making them an attractive target for fraud.
A fraudulent invoice, compromised email account, unauthorized vendor change, or weak approval process can be enough to send a legitimate payment to the wrong place. Business email compromise (BEC) is particularly important for finance teams to recognize because criminals often impersonate executives or vendors and request seemingly legitimate payments or changes to payment information.
The FBI recommends independently verifying payment requests and changes to account information rather than relying solely on information provided through email.
Preventing every fraud attempt may not be possible, but businesses can make fraudulent payments significantly harder to execute.
Use this AP fraud prevention checklist to evaluate your current accounts payable controls.
No single employee should have unchecked control over a significant payment from beginning to end.
Multi-level approval workflows can require transactions to pass through multiple authorized users before funds are released. Approval requirements can also change depending on the amount, department, vendor, or other business rules.
For example:
This adds additional review to higher-risk transactions without unnecessarily slowing down routine payments.
Learn more about how payment approval workflow software improves financial control.
Segregation of duties is an important component of AP fraud prevention.
Ideally, the same person should not be able to create a vendor, modify payment information, approve an invoice, and release the payment without additional oversight.
Dividing responsibilities creates checkpoints throughout the payment process. If something unusual happens, another authorized employee has an opportunity to catch it before money leaves the organization.
Treat unexpected changes to vendor payment information as a red flag.
Fraudsters may impersonate legitimate vendors and request that future payments be sent to a different account. A compromised vendor or employee email account can make these requests appear convincing.
Before changing bank account information, independently contact the vendor using previously verified contact information—not the phone number or email included in the change request.
The FBI specifically recommends verifying changes to account numbers or payment procedures with the person making the request and warns businesses to be cautious about last-minute changes to payment information.
A stolen password shouldn't automatically give someone access to your payment systems.
Multi-factor authentication (MFA) adds another verification step when users sign in. Even if login credentials are compromised, an attacker still faces an additional barrier.
The FBI recommends enabling two-factor or multi-factor authentication on accounts that support it.
TROY Pay incorporates MFA, SSO, and role-based access control to help organizations control access to payment functions.
Learn more about TROY Pay's secure vendor onboarding and payment setup.
Not everyone needs access to every payment function.
Role-based access control allows organizations to determine what different users can see and do within their payment environment.
An AP employee may need to prepare payments, for example, while only an authorized manager can approve them. Other users may only need reporting or payment-status access.
Applying least-privilege principles reduces unnecessary access and can limit the damage caused by a compromised account. The FBI also recommends strong authentication and least-privilege access as part of managing third-party cybersecurity risk.
A payment request can look legitimate and still be fraudulent.
Business email compromise can involve criminals impersonating executives, employees, or trusted vendors. Attackers may spoof an email address or gain access to a legitimate account and use existing invoice conversations to make fraudulent requests more convincing.
Train AP employees to watch for:
When something looks unusual, verify it through a separate, trusted communication channel before proceeding.
Strong fraud prevention doesn't stop when a payment is approved.
Organizations also need visibility into who performed each action throughout the payment lifecycle.
Detailed records can help finance teams determine who created, reviewed, approved, modified, or executed a payment. Centralized audit information is also valuable when investigating suspicious activity or preparing for an audit.
This is one reason moving approvals out of scattered emails and spreadsheets can strengthen payment control.
Finance teams often know what "normal" looks like.
A new vendor receiving a large payment, an unusual payment amount, multiple duplicate transactions, or a sudden change in payment instructions should receive additional scrutiny.
The FBI advises organizations to carefully examine requests that appear outside normal payment patterns.
Centralized payment visibility makes it easier to identify transactions that deserve a second look.
Reconciliation shouldn't be treated only as an accounting task.
It can also serve as a fraud-detection control.
Regularly comparing authorized payments with bank activity and internal records can help finance teams identify duplicate, incorrect, or unauthorized transactions sooner.
TROY Pay centralizes vendor payments, payment tracking, and reconciliation capabilities to give finance teams greater visibility throughout the payment lifecycle.
Explore how TROY Pay helps businesses manage vendor payments.
Even strong controls cannot guarantee that fraud will never occur.
Your organization should know what happens if a suspicious or fraudulent payment is discovered.
Document who needs to be contacted, how payment access should be restricted, who communicates with the financial institution, and how the incident should be investigated and documented.
Speed matters. The FBI advises BEC victims to contact their financial institution immediately and report the incident to the FBI's Internet Crime Complaint Center.
Use these questions to quickly review your current payment process:
☑️ Are significant payments reviewed by more than one person?
☑️ Are payment creation and payment approval separated?
☑️ Are vendor banking changes independently verified?
☑️ Is MFA required for payment-system access?
☑️ Are user permissions based on job responsibilities?
☑️ Are employees trained to recognize BEC and phishing attempts?
☑️ Are unusual or high-value transactions given additional review?
☑️ Can you see who created, modified, approved, and executed payments?
☑️ Are payments reconciled regularly?
☑️ Does your organization have a documented fraud response plan?
If several of those answers are "no," there may be opportunities to strengthen your AP controls.
AP fraud prevention is not one feature or one security tool. It is a combination of people, processes, authentication, approvals, verification, and visibility working together.
Technology can help make those controls easier to consistently enforce.
TROY Pay gives finance teams a centralized platform for managing vendor payments while supporting structured approval workflows, MFA, SSO, role-based access control, and payment tracking.
Instead of relying on disconnected emails and manual handoffs, businesses can build more control directly into the payment process.
Accounts payable fraud occurs when someone manipulates invoices, vendors, payment information, approvals, or other parts of the AP process to improperly obtain money from an organization. It can involve external criminals, internal employees, or a combination of both.
Warning signs can include unexpected bank account changes, unusual payment amounts, duplicate invoices, new vendors receiving large payments, requests to bypass normal approval procedures, and urgent requests to send money. No single warning sign proves fraud, but unusual activity should receive additional review.
Businesses can reduce vendor payment fraud risk by independently verifying vendor information changes, requiring appropriate payment approvals, separating payment responsibilities, using MFA and role-based access, monitoring transactions, and maintaining detailed payment records.
Approval workflows cannot guarantee that fraud will never occur. However, multi-level approvals can introduce additional checkpoints before a payment is released, making it more difficult for one compromised account or unauthorized individual to independently execute a fraudulent payment.
Contact the vendor through previously verified contact information and confirm the requested change with an authorized representative. Do not rely exclusively on contact information included in the email requesting the change. This approach aligns with FBI guidance for protecting businesses from BEC scams.
Segregation of duties prevents one individual from controlling every stage of a payment. Separating responsibilities for vendor management, payment preparation, approval, and execution creates additional opportunities to detect errors or unauthorized activity.
MFA can significantly strengthen account security, but it is not a complete fraud-prevention strategy. Organizations should combine authentication with approval controls, independent verification, user permissions, employee training, monitoring, and reconciliation.