Accounts payable fraud in 2025: How to spot it, stop it, and stay ahead

If you work in finance, accounts payable fraud is something you can’t afford to ignore. Whether you're in charge of payments, managing vendors, or overseeing internal controls, fraud can sneak into your processes. And cost you big.

From phishing scams to fake invoices, fraudsters are getting smarter. According to AFP, 79% of organizations fell victim to attempted or actual payments fraud in 2024. But with the right tools and strategies, you can stay ahead of them.

This guide walks you through:

• What accounts payable fraud is
• The most common types of AP fraud
• Real-world examples of what can go wrong
• Red flags to watch for
• Best practices to prevent fraud
• How AP automation and virtual cards help you take control 

Key takeaways 

• Paper checks are your weakest link 
  Check fraud is still the most common type of payment fraud, so switching to digital methods like virtual cards or ACH is a smart move.
• Invoice scams are easier to miss than you think
  Without automated approvals and vendor verification, fake or inflated invoices can slip through unnoticed.
• Fraud red flags are easy to spot if you know where to look
  Keep an eye on new vendors, urgent payment requests, missing documentation, and sudden changes to bank details.
• You don’t need a complete overhaul to improve security
  Simple actions like segregating duties, setting approval thresholds, and training your team can make a big difference.
• Automating AP with Rillion helps you stay in control
  With automated three-way matching, secure approvals, and built-in payment controls, Rillion's AI-powered AP automation platform makes it easier to stay in control.

What is accounts payable fraud?

Accounts payable (AP) fraud happens when someone manipulates your payment process to steal funds illegally. It could be an outside criminal posing as a vendor, or someone inside your team quietly altering invoices or bank details. 

Whether it’s internal or external, deliberate or careless, AP fraud leads to real financial losses and reputational damage. And because payment fraud often hides in plain sight, it can go undetected for months. Until it’s too late. 

How common is AP fraud?

The stats don’t lie. According to the 2025 AFP Payments Fraud and Control Survey Report:

• 79% of organizations have experienced attempted or actual payments fraud
• 63% were targeted by Business Email Compromise (BEC)
• 63% reported check fraud
• 49% were hit with phishing scams aimed at the AP team

Finance teams can’t turn a blind eye to this. If your internal controls aren’t airtight, you could be next. 

Common types of AP fraud

You can’t fight what you don’t understand. Here are the most common accounts payable fraud schemes you should know:

1. Check fraud

Checks are involved in 63% of payment fraud causes, making it the riskiest payment method. Criminals can steal check info, alter payees or amounts, or print fake checks. If you're still using paper checks, you're at high risk.  

2. Invoice fraud

Scammers submit fake or inflated invoices. Sometimes through legit vendors or fake vendor accounts.

3. Wire transfer fraud

A fraudster impersonates a vendor or exec, convincing you or your team to send money to the wrong account. Once it's gone, it's nearly impossible to recover.

4. ACH fraud

Unauthorized electronic payments are made using stolen or fabricated banking details. If you're not validating bank info, you're vulnerable.

5. Phishing & BEC

Emails that look legit but aren’t. These scams trick employees into clicking malicious links, sharing credentials, or authorizing shady payments. It’s the most common type of fraud attempt. 

Real-world examples: Accounts payable fraud cases

Anyone’s a potential target. Plenty of companies (big and small) have learned the hard way:

• Yale University lost $40 million to a single employee submitting fake tech purchases.
• A small gift shop was drained of $300K by its own AP clerk.
• Google and Facebook lost over $100 million to a vendor impersonation scheme.

The moral of the story is: if it can happen to them, it can happen to you. 

4 warning signs of AP fraud

Early detection is key to protecting your business from fraud. Watch for:

• Unusual payment requests: Payment requests that seem urgent or unusually large. This could also include payments to personal accounts.
• Unfamiliar vendors: Vendors you don’t recognize or familiar vendors suddenly changing bank details.
• Missing documentation or duplicate invoices: Invoices or purchase orders that are missing details or have errors.
• Pressure to rush approvals or bypass normal steps: Fraudsters often try to rush the payment process to avoid detection.

If something feels off, slow down and investigate. 

9 steps to prevent accounts payable fraud

You don’t have to rebuild your entire finance function to improve security. Start with these best practices to prevent AP fraud:

1. Ditch the checkbook

Checks are 7x more likely to be involved in fraud than virtual cards. Transitioning to digital payment methods significantly reduces risk.

2. Start using virtual cards

Virtual cards give you:

• Unique card numbers for each payment
• Fixed dollar limits and expiration dates
• No need to share bank account info
• Faster, more secure reconciliation
• Internal controls built-in 

Only 9% of attempted fraud targets virtual cards — compared to 63% for checks — according to the 2023 AFP Payments Fraud and Control Survey.

3. Set approval limits

Require approvals for high-value payments to reduce risks.

4. Segregate duties across staff

The same person shouldn’t be able to submit, approve, and issue payment. Use role-based access.

5. Use real-time audit trails  

Know who approved what, when, and why. Without digging through email threads.

6. Automate vendor verification

Outdated or duplicate vendor records create openings for fraud. Use data validation tools and do routine cleanups of contact information, banking details, and other important information.

7. Train your team on fraud awareness

People are your first line of defense. Show them how to recognize phishing, spoofing, and suspicious payment requests. And provide them with the tools they need to prevent fraud.

8. Make it easy to report suspicious activity

Give employees a clear, confidential way to flag concerns before it’s too late. It could be an email address or a hotline.

9. Automate the AP process

Manual AP systems rely on spreadsheets, email threads, and disconnected workflows. It’s the perfect environment for fraud to thrive in. You’ll tackle this by implementing AP automation software to ensure security.  

Read also: Maximizing efficiency with 5 essential best practices for AP automation success

How can AP automation help prevent fraud?

You don’t have to catch every scam on your own. Modern AP automation and payment automation solutions can help you:

• Automatically flag suspicious invoices
• Streamline approvals with audit trails
• Match payments to verified vendors
• Prevent check fraud with Positive Pay
• Analyze patterns across your payment history 

What to look for in an AP automation and payment system?

Fraud prevention isn’t just about transactions. Your infrastructure is just as important in preventing AP fraud. Your systems should support:

• Bank account validation
• KYC/KYB verification
• OFAC screening
• Multi-factor authentication and access controls
• Encryption, secure hosting, and role-based permissions

These protections keep your data safe and help you meet compliance standards like SOX and AML regulations. 

How Rillion reduces fraud risk in accounts payable

Rillion helps organizations secure their AP and payment operations from invoice capture to payment reconciliation.  

Here’s what that looks like:  

• Automated invoice capture: Reduce human error and eliminate manual entry  
• Approval workflows with thresholds: Route invoices to the right people  
• 3-way matching: Match invoices automatically with purchase orders and delivered goods to ensure accuracy
• Role-based permissions: Enforce internal controls and limit access  
• Full audit trails: Monitor and document every approval  
• Digital payments: Rillion offers secure digital payments — including virtual card protections — for an end-to-end, fraud-resistant workflow  
• Real-time dashboards: Instantly detect anomalies and delays  

Whether you’re a growing company or a multi-entity enterprise, Rillion helps you reduce fraud, improve compliance, and gain complete financial visibility. 

Ready to take control?

If you’ve experienced fraud — or worry you’re at risk — it’s time to act. Don’t wait until you’re chasing down lost funds or explaining a breach to the board.

Taka a deep breath and start here:

• Review your current process
• Identify your weak spots
• Automate what you can
• Talk to a partner who’s been there

Rillion is here to help. We’ve been protecting finance teams for over 30 years. Book a personalized demo and see how we can reduce your fraud risk, streamline your payments, and put you back in control.

Psst! We’ve put together a guide to AP fraud prevention. Grab your copy of the Accounts Payable Fraud Prevention Playbook, it’s free. 

Accounts payable fraud FAQs

What is an example of accounts payable fraud?

A common example is invoice fraud. It’s when a scammer submits a fake invoice using a vendor's name or sets up a false vendor entirely. The payment appears legitimate and is processed without suspicion. Another example is check fraud, where someone alters payment details to redirect funds.

How does accounts payable fraud happen?

It happens when internal controls fail or are bypassed. Fraudsters might impersonate vendors, submit duplicate invoices, falsify payment requests, or exploit weak segregation of duties. Phishing emails and rushed approvals often play a role in successful attacks.

Who commits accounts payable fraud?

Both external actors (e.g., cybercriminals or fake vendors) and internal employees (e.g., AP clerks or managers) can commit AP fraud. Internal fraud often goes undetected longer and involves altering records or diverting payments to personal accounts.

How can you detect AP fraud early?

Look for red flags like new or unfamiliar vendors, duplicate invoices, pressure to expedite payments, or changes to vendor bank details. Tools like invoice automation, Positive Pay, and bank validation services can flag suspicious activity early.

What controls prevent accounts payable fraud?

Key controls include:

• Segregation of duties
• Dual approval workflows
• Verified vendor onboarding
• Bank account validation
• Use of virtual cards
• Regular audits and reconciliations

AP automation platforms can help enforce these controls consistently.

Is AP fraud covered under SOX compliance?

Yes. Under SOX Section 404, companies must establish and document internal controls for financial reporting, which includes AP processes. Failure to prevent or detect fraud can lead to SOX violations, audit findings, and financial restatements.