Types of Accounts Payable Fraud to Watch in 2025

Accounts payable (AP) fraud is a growing concern for businesses, and it’s likely to become even more challenging in 2025. Scammers are using advanced technologies like artificial intelligence (AI) to create convincing fraud schemes, while traditional scams like fake invoices remain common.

 

Key Takeaways

• AP fraud is on the rise, with 84% of large businesses facing fraud attempts in 2023, suggesting a continued trend into 2025.
• Fraud ranges from external scams like phishing to internal issues like payroll manipulation.
• AI and deepfake technologies are making fraud harder to detect.
• Tools like AI detection and employee training can reduce risks.
• Offers solutions to streamline AP processes and combat fraud.

 

Why AP Fraud Matters

AP fraud involves unauthorized transactions or data manipulation in the payment process, costing businesses billions. In 2024, total fraud losses reached $12.5 billion, a 25% increase from 2023 (FTC). Staying proactive is essential to avoid financial and reputational damage.

 

Common Fraud Types

• Invoice Fraud: Fake or altered invoices trick companies into paying scammers.
• Phishing Scams: Emails posing as vendors steal sensitive information.
• Business Email Compromise (BEC): Hackers redirect payments using fake emails, with $2.7 billion lost in 2022 (FBI IC3).
• Deepfake Fraud: AI-generated voices or videos impersonate executives to authorize payments.
• Internal Fraud: Employees may submit fake expense claims or manipulate payroll.

 

How to Protect Your Business

Using platforms like Zenwork Payments, businesses can automate AP processes, verify vendors, and detect fraud early. Regular audits, employee training, and multi-factor authentication also help keep your finances secure.

 

Guide to Accounts Payable Fraud in 2025

As businesses navigate the digital landscape of 2025, accounts payable fraud remains a critical challenge, driven by sophisticated technologies and persistent traditional scams. This comprehensive guide, tailored for expert readers, explores the top types of accounts payable fraud, supported by the latest statistics, emerging trends, and actionable prevention strategies. With solutions like Zenwork Payments, businesses can safeguard their financial operations against these evolving threats.

• Escalating Fraud Risks: Accounts payable fraud is increasing, with 84% of businesses with revenues over $1 billion facing fraud attempts in 2023, indicating a likely upward trend into 2025.
• Diverse Fraud Landscape: External threats like invoice fraud and internal risks like payroll manipulation create a complex fraud environment.
• AI-Driven Threats: Fraudsters leverage AI for phishing, deepfakes, and synthetic identities, with synthetic identity fraud projected to cause $23 billion in U.S. losses by 2030.
• Emerging Vulnerabilities: ACH fraud, deepfake technology, and third-party risks are growing concerns.
• Proactive Defense: AI-powered fraud detection, robust vendor verification, and employee training are essential to combat accounts payable fraud.

 

Understanding Accounts Payable Fraud

Accounts payable fraud involves unauthorized transactions, data manipulation, or misappropriation within the AP process. It targets the payment cycle, exploiting vulnerabilities in vendor management, invoice processing, and payment approvals. The financial impact is significant global fraud losses reached $12.5 billion in 2024, a 25% increase from 2023, with 38% of fraud reports involving monetary loss. For AP teams, the stakes are high, as fraud not only drains resources but also damages vendor relationships and regulatory compliance.

 

Types of Accounts Payable Fraud

External Fraud

External accounts payable fraud originates outside the organization, often exploiting digital communication channels.

 

Invoice Fraud

Scammers create fake invoices or alter legitimate ones to divert payments. In 2023, 84% of businesses with over 100 payment accounts reported fraud attempts, many involving invoices.

Red Flag: Invoices with mismatched vendor details, such as new bank accounts or formatting discrepancies.

Prevention: Deploy AI-powered tools to detect anomalies and cross-check invoices with purchase orders and vendor records.

 

Phishing Scams

Phishing attacks, enhanced by AI, trick employees into sharing sensitive data or authorizing payments. Phishing accounts for 40% of identity fraud cases, a trend likely to persist in 2025.

Red Flag: Unsolicited emails with urgent payment requests or suspicious links.

Prevention: Implement spam filters, domain authentication, and multi-factor authentication (MFA). Train staff to identify phishing tactics.

 

Vendor Fraud

Fraudsters establish fake vendor profiles or compromise legitimate ones to siphon funds, often submitting inflated invoices for non-existent services.

Red Flag: Sudden changes to vendor banking details or payment terms without verification.

Prevention: Conduct regular vendor audits and use master data management systems. AI can flag unusual payment patterns.

 

Payment Diversion Fraud (Business Email Compromise)

Business Email Compromise (BEC) involves hackers intercepting or mimicking emails to redirect payments. From 2013 to 2022, BEC scams caused $50 billion in losses, with $2.7 billion in 2022 alone.

Red Flag: Payment rerouting requests from unfamiliar email domains or with subtle discrepancies.

Prevention: Verify payment changes via secure secondary channels, such as phone calls to known contacts. AI solutions can detect discrepancies in payment requests.

 

Internal Fraud

Internal accounts payable fraud arises from within the organization, often exploiting access to financial systems.

 

Expense Reimbursement Fraud

Employees submit fake or inflated expense claims, such as duplicate receipts or personal expenses mislabeled as business costs.

Red Flag: Excessive reimbursement requests or claims submitted post-company events.

Prevention: Use automated expense management systems with AI to verify receipts. Conduct periodic audits to identify patterns.

 

Payroll Fraud

This involves manipulating payroll systems to add ghost employees, inflate hours, or issue unauthorized raises.

Red Flag: Unexplained overtime increases or payments to non-working employees.

Prevention: Implement role-based access controls and segregate payroll duties. AI tools can monitor payroll data for anomalies.

 

Internal Financial Fraud

Employees may misappropriate funds or approve fraudulent vendor payments, often through kickback schemes with external parties.

Red Flag: Unusually close vendor relationships or consistent high-value invoice approvals.

Prevention: Require dual approvals for large transactions and establish anonymous reporting channels. Fraud detection tools can flag suspicious patterns.

 

Data Manipulation Fraud

Altering financial data to conceal theft or inflate performance metrics is a subtle but damaging form of accounts payable fraud.

Red Flag: Inconsistencies between financial reports and inventory records.

Prevention: Use advanced analytics to monitor data integrity. Restrict access to sensitive financial systems.

 

Emerging Threats

New technologies and trends are introducing novel accounts payable fraud risks in 2025.

 

ACH Fraud

Scammers exploit the Automated Clearing House (ACH) network to redirect payments, a growing concern as digital transactions increase.

Red Flag: Unauthorized changes to ACH routing details from unverified sources.

Prevention: Deploy ACH fraud detection systems and require dual authentication for payment changes.

 

AI-Powered Fraud

Fraudsters use AI to create hyper-realistic phishing emails, fake vendor communications, and bypass traditional detection systems. AI-driven fraud is expected to escalate in 2025.

Red Flag: Overly personalized or persuasive communications mimicking trusted sources.

Prevention: Counter with AI-driven fraud detection tools that adapt to evolving tactics.

 

Deepfake Technology

Deepfakes use AI to mimic executives’ voices or appearances, tricking AP teams into approving fraudulent payments. In 2024, 53% of finance professionals reported deepfake scam attempts.

Red Flag: Urgent payment requests from “executives” with unusual tones or behaviors.

Prevention: Verify high-value requests via in-person or encrypted channels. Train staff to question suspicious communications.

 

Third-Party Risks

Increased reliance on vendors and outsourced AP processes expands the attack surface. In 2025, 45% of organizations are projected to face software supply chain attacks, which could involve third-party vendors.

Red Flag: Urgent payment requests from unverified third parties or frequent vendor detail changes.

Prevention: Monitor third-party transactions with automated systems and assess vendor security protocols regularly.

 

Category	Source	Fraud Data
Total Fraud Losses	FTC	$12.5 billion in 2024, up 25% from 2023
Investment Scams	FTC	$5.7 billion in losses in 2024
B2B Payment Fraud	JPMorgan Chase	65% of companies faced fraud in 2022
BEC Losses	FBI IC3	$50 billion from 2013–2022, $2.7 billion in 2022
Synthetic Identity Fraud	LSEG	Projected $23 billion in U.S. losses by 2030
Mobile Payment Fraud	BioCatch	Increased from 47% in 2022 to 61% in 2023
Deepfake Scams	CFODIVE	53% of finance professionals targeted in 2024
Software Supply Chain Attacks	Gartner	45% of organizations projected to be affected in 2025

 

Prevention Strategies

To combat accounts payable fraud, businesses must adopt a multi-layered approach:

• AI-Powered Fraud Detection: Tools like those offered by Zenwork Payments use machine learning to identify anomalies in invoices, payments, and vendor data in real time.
• Employee Training: Regular training on fraud red flags, phishing tactics, and deepfake awareness empowers staff to act as a first line of defense.
• Multi-Factor Authentication (MFA): Adding MFA to payment approvals and system access reduces unauthorized access risks.
• Regular Audits: Periodic reviews of AP processes, vendor records, and financial data help detect irregularities early.
• Vendor Verification: Implement robust vendor onboarding and ongoing verification processes, using master data systems and AI to flag suspicious changes.
• Blockchain Technology: Emerging solutions use blockchain for transparent, tamper-proof transaction records, enhancing security.
• Segregation of Duties: Divide responsibilities among employees to prevent any single individual from controlling the entire AP process.

 

FAQs

• What are the most common types of accounts payable fraud in 2025?

External fraud includes invoice fraud, phishing, vendor fraud, and BEC. Internal fraud encompasses expense reimbursement, payroll, financial, and data manipulation fraud. Emerging threats like ACH fraud, AI-powered fraud, deepfakes, and third-party risks are also significant.

• How can businesses protect against AI-powered accounts payable fraud?

Deploy AI-driven fraud detection tools to counter evolving threats, implement MFA, and use strong email security measures. Training employees to recognize sophisticated phishing and deepfake attempts is crucial.

• What role does vendor management play in preventing accounts payable fraud?

Regular vendor audits, master data management systems, and AI monitoring ensure vendor authenticity and detect unusual changes, reducing risks of vendor fraud and BEC.

• How can companies ensure compliance while preventing internal fraud?

Role-based access controls, regular audits, and automated systems for transaction monitoring promote compliance. A culture of transparency and anonymous reporting further mitigates internal risks.

• What are the latest trends in fraud detection technology for accounts payable?

AI and machine learning enable real-time anomaly detection, blockchain ensures secure transaction tracking, and advanced analytics identify fraudulent patterns, all enhancing AP security.

 

Conclusion

Accounts payable fraud in 2025 is a multifaceted threat, driven by traditional scams and cutting-edge technologies like AI and deepfakes. With fraud losses soaring and new vulnerabilities emerging, businesses must prioritize proactive measures. Zenwork Payments offers a comprehensive AP automation platform with advanced fraud detection, empowering organizations to streamline processes and protect their finances. By combining technology, training, and vigilance, businesses can stay ahead of fraudsters in 2025.

 

Ready to Secure Your Accounts Payable? 

Don’t let accounts payable fraud jeopardize your business. Start using Zenwork Payments’ advanced fraud detection and AP automation tools, designed to tackle the challenges of 2025. Safeguard your finances and optimize your payment processes today. 

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