Accounts payable fraud in small businesses is rarely sophisticated. It is ordinary, it is usually committed by somebody trusted, and it leaves signals in the ledger that a person looking would notice. The four common schemes are a fictitious supplier, a diverted payment to changed bank details, a duplicate invoice submitted for personal gain, and a genuine supplier billing for more than was received with somebody inside colluding. Understanding what each looks like from the inside is more useful than a general warning, because each leaves a different trace and each is caught by a different check. This page is the four, their signals, and the checks that find them.
Fictitious suppliers and diverted payments
A supplier created to receive payments, or a real supplier's bank details changed to somebody else's. The signals are a new supplier with sparse details, an address matching an employee's, invoices that are always round numbers and always just under an approval threshold, and a bank detail change with no independent confirmation. Reviewing new suppliers and bank changes catches both.
Duplicates and inflated billing
The same invoice submitted twice, or a supplier billing for quantities never delivered. Duplicates show up in an amount-sorted review; inflated billing shows up in matching, which is one reason a matching control that operates consistently is worth more than one that operates when there is time.
The common thread: threshold behaviour
Most of these schemes involve staying just below whatever triggers a second pair of eyes. Looking specifically at invoices clustered just under an approval threshold is one of the highest-yield checks available, and it takes minutes.
Questions people ask about accounts payable fraud
How common is this?
Common enough that the ACFE maintains extensive material on occupational fraud schemes and how they are detected. We are not going to quote you a statistic we have not verified against a source we can cite; read theirs.
What is the best single defence?
Somebody outside finance reviewing new suppliers, bank detail changes and the payment run, and recording that they did. It is detective rather than preventive and it is what most small businesses can actually operate.
What should we do if we suspect something?
Stop, preserve the records, and take professional advice before confronting anybody. Investigating informally destroys evidence and can make matters considerably worse.