--- title: Five ways businesses are being defrauded url: https://www.medius.com/blog/five-ways-businesses-are-being-defrauded/ updated: 2025-05-23T21:10:16Z --- [Back to Blog](https://www.medius.com/blog/) Accounts Payable 12.16.2022 # Five ways businesses are being defrauded and how AP automation software can help stop it Increasing fraudulent activity Occupational fraud is nothing new, but it has increased at an unprecedented scale in the last two years due to Covid-19. The Association of Certified Fraud Examiners (ACFE) reported to the Nation on Occupational Fraud and Abuse that [41.8% of fraud takes place in private businesses](https://www.acfe.com/-/media/files/acfe/pdfs/2004rttn.ashx). Since only 12% of fraudulent activity is committed by prior offenders, the majority of fraudulent offences are carried out by seemingly honest employees. This stark fact sadly shows no sign of slowing down, with payment and invoice fraud at particular risk of increasing in the next 12 months. In this article, learn about the five ways businesses are susceptible to defraud and how [AP automation](https://www.medius.com/solutions/medius-accounts-payable-automation/ "Medius Accounts Payable Automation") software can provide the solution. ## 1. Scrutinize the small print to root out vendor fraud The payment paradigms matter. Neglecting the small print in fast-pace and large-scale organisations is what fraudsters desire to funnel company money into their personal accounts and as a result, millions are embezzled via vendor fraud because most businesses are oblivious to it. To combat this, companies must vet their vendors. Start with vendor enrollment and verify mailing addresses, contact numbers, vendor tax identification numbers, points of contact, and bank accounts. Onboarding a vendor as part of your organisation is the first crucial step in identifying vendor fraud. After you’ve secured your vendors, continue to prioritise the fine print. Build ongoing data analysis via AP automation software into your business models to help identify unauthorised payments to unrecognisable accounts, transactions at odd hours of the day, and faraway transactions to unfamiliar countries. ## 2. Keep a lookout for irregularities in payments Knowing where to look is half the problem. The average fraudster holds a senior position and has been employed by the company for at least five years. Therefore, they know how to slip illegal transactions among legitimate ones, which makes invoice fraud detection that much more challenging. Watch out for payments that have been rounded up, duplicate transactions, and very small or very large payment requests. These are all red flags. AP automation software is a useful scouting tool. With automation, systems can be customised to keep track of verified transactions. Companies can use these tools to clearly define who controls the purse strings and who authorises payments. This makes transactions more transparent, accessible, and verifiable, which will make it easier for businesses to monitor fraudulent patterns. ## 3. Choose digital over the physical to eliminate cheque fraud According to [research from NatWest](https://www.natwest.com/business/insights/technology/cyber-security/the-lowdown-on-employee-fraud.html), fraud costs UK businesses [£190 million annually](https://www.natwest.com/business/insights/technology/cyber-security/the-lowdown-on-employee-fraud.html), and 40% of that figure is stolen by staff. Whilst most fraudulent activity is conducted online, companies must be aware that physical cheque-grabs still occur in-transit, as not all businesses have upgraded to a more digitised system. Other methods of cheque fraud include using counterfeit, non-bank issued cheques and forgery. To eliminate this risk, businesses should opt for digital software. Automated AP enables a highly securitised payments process which prevents fraudsters from manually changing any aspect of invoice data – thus eliminating the risk of paper steals. ![choose-digital](https://www.medius.com/media/4rmdwzoo/defrauded-1.png?rmode=max&width=400&height=254) ## 4. AP Automation software increases compliance and decreases invoice fraud Fraudsters need poor compliance procedures to succeed in their illicit behaviour. They tend to intercept email exchanges, or compromise an email account - all of which is made possible with decentralised invoicing. [AP Automation](https://www.medius.com/solutions/medius-accounts-payable-automation/ "Medius Accounts Payable Automation") solidifies the compliance process, creating a singular channel in which payments are handled, therefore making it harder for fraudsters to tamper with and redirect payment details into their personal accounts. ## 5. Cloud AP Automation software is a game changer against fraud The increasingly digitised world of work means that fraudulent activity also becomes more digitised. Unfortunately, limited time, resources and hybrid working mean that businesses cannot oversee every payment transaction, which provides the very opportunity fraudsters need to infiltrate networks and exploit private data. Cloud AP Automation software helps to tackle this very problem. It provides a visible and secure environment which users can employ from any location, at any time, as well as a timely and frequent communication channel. This system is based on centrality, transparency, and visibility and allows users to flag irregular transactions as soon as they see them. [Medius accounts payable software](https://www.medius.com/solutions/medius-accounts-payable-automation/ "Medius Accounts Payable Automation") allows finance teams to work in an environment where frequent and real-time data, irregular paradigms and attention to detail can all work together to reduce the risk of defrauding businesses. ![business-defrauded](https://www.medius.com/media/kfci3q3r/defrauded-2.jpg?rmode=max&width=500&height=282) **Get started** Not sure where to start? [Book a free demo](https://www.medius.com/book-a-demo/ "Book a Demo"). We’ll guide you through your AP optimization options and narrow it down for you (no strings attached). Is your AP team a target? Safeguard your accounts payable process from evolving fraud threats with the AP Fraud Fighter’s Toolkit. - Assess your organization’s fraud risk with a targeted self-assessment. - Identify key AP fraud risks, from fake invoices and vendor fraud to internal manipulation and cybersecurity threats. - Get actionable prevention strategies, including real-time AI-powered detection, multi-step approvals, staff training, and robust audits. [Get the toolkit](https://www.medius.com/resources/guides-reports/ap-fraud-fighters-toolkit/ "AP Fraud Fighters Toolkit") [!\[AP Fraud Fighter’s Toolkit cover\](https://www.medius.com/media/wollozkt/resource-menu_fraud-fighters-toolkit.png?rmode=max&width=372&height=0&v=1dbc6a26880ba70)](https://www.medius.com/resources/guides-reports/ap-fraud-fighters-toolkit/) #### Medius Financial Census 2026 87% of finance pros have ignored suspected fraud. That's just one finding. See what 2,386 finance leaders revealed about fraud, late payments, AI, and the profession's future. [Get the report](https://www.medius.com/resources/guides-reports/medius-financial-census-2026/ "Medius Financial Census 2026") #### Ardent Partners' State of AP in 2026 AI is changing what AP teams can do, and fast. Get leading analysts at Ardent Partners' take on where the industry is headed. [Get the report](https://www.medius.com/resources/guides-reports/ardent-partners-state-of-ap/ "Ardent Partners State of AP") #### Webinar: Preparing for agentic AI in AP In this webinar with SSON, see how leading finance teams are moving from automation to autonomous AP, with real governance built in. [Watch the webinar](https://www.medius.com/resources/events-and-webinars/through-trust-and-governance-sson/ "Through trust and governance SSON") #### Discover accounts payable benchmarks Learn the efficiency metrics that matter for AP teams and the benchmarks derived from thousands of Medius customers around the globe. [Get the report](https://www.medius.com/resources/guides-reports/ap-benchmark-report/ "AP Benchmark Report") #### Questions about AP automation? Let's talk through it. A 30-minute conversation with a Medius expert costs you nothing and might save you a lot. 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