If you are operating your business in 2025, and your AP department has not encountered any fraud yet, you might be in minority because Accounts Payable (AP) frauds in 2025 is hitting organizations harder than ever. In 2024 alone, 79% of companies reported attempted or actual payments fraud. That’s nearly 8 in 10 of your peers getting burned by fake invoices, ghost vendors, and scheme-of-the-month hijinks.
Fraud doesn’t wait for your approval. It moves fast. One moment you’re processing bills. The next moment you’re chasing duplicates, inflated totals, and bank account takeovers.
Common AP Fraud Types in 2024
Last year, the most common types of AP fraud were invoice fraud, ghost vendor fraud, duplicate payments, bank detail fraud, and business email compromise style diversion. Each of those types of account payable fraud exploits a weak link in onboarding, invoice capture, approval flow, or payment execution.
In order to be able to fight against any type of AP fraud, you need to understand the different types of account payable fraud occurring in 2025.
What is Accounts Payable (AP) Fraud?
The AP department in any organization is one of the most critical and important departments. This is the department that is responsible for paying the vendors and suppliers. But it’s also the department that constantly faces the fear of fraud and scams. But what is AP fraud? It’s a common type of deception that targets the AP department. It can be done by an employee of the organization, external vendors, or any third party as well.
Red Flags to Detect for AP Fraud
Although it’s difficult to exactly identify whether you are being targeted, there are a few red flags that can indicate whether you are being targeted.
- Identical Invoice Numbers or Amounts
- Invoices Rounded to Even Totals
- Missing Proper Purchase Orders (PO) or Approvals
- Unusually Large Payments to One or New Vendors with No History
- Invoices Just Below Approval Thresholds
Types of Accounts Payable Fraud 2025
Ghost Vendors / Fictitious Vendors
Ghost vendor fraud hides in plain sight. Someone slips in a vendor record for a company that doesn’t exist, with no site visit, no background checks, and no W-9 form. You pay a scammer’s bank account and realize you’ve got nothing to show for it.
Solution: TIN matching at onboarding stops ghost vendors cold before they wreaks havoc in your accounting system.
Duplicate Payments
Duplicate payments are a headache for the AP department. You pay the same bill twice, maybe three times. You reconcile and wonder why you’re out extra thousands. Integration with accounting systems and bulk invoice imports can catch repeat invoice numbers and duplicate vendor bill patterns.
Solution: Single payer/ Payers dashboards will pull this data in one place, so you can easily identify the duplicate invoices.
Phishing & Business Email Compromise (BEC)
Bank email fraud happens generally when a vendor requests a change of account info by email. Someone approves it without verification. Money lands in the fraudster’s account and disappears. 63% of organizations cite BEC (Business email compromise) as their number one avenue for fraud attempts. Fraudsters impersonate your CFO or supplier, ask for expedited payment, and redirect funds.
Solution: Role- based approval workflows, unique email ids for each role, industry standard data encryption, and audit trails make that scenario a lot harder. These controls are your frontline against accounts payable fraud in 2025.
Multi-entity controls, strict segregation of duties, and scheduled payment workflows block this path. Although you still need to train staff to spot phishing emails and off-hours invoice submissions. Every control layer you add matters!
Note: Studies show that only 22% of businesses recovered three quarters or more of their stolen funds in 2024. 30% couldn’t reclaim any of it. These numbers shows why fighting accounts payable fraud in 2025 is urgent.
How to Fight Different AP Frauds?
Start with vendor onboarding. Make it a requirement for every vendor to submit a completed W-9 form and run a real-time TIN match. No exceptions. This cuts out ghost vendors and bogus bank detail change requests.
Next, automate invoice capture with OCR. It extracts invoice details, reduces manual typing errors and speeds your process so you can spot duplicates or inflated totals before they slip through.
Then, you can set up customizable approval workflows. Assign tiers of approvers for onboarding, bill entry, and payment release. Split duties so no single person can both create a vendor and cut a payment. That segregation stops internal collusion and fraudsters posing as insiders. Every action gets logged in an audit trail.
Flexible payment options must live inside the same secured platform. Whether you’re sending ACH or checks, keep it all in one platform, like Zenwork Payments.
Schedule recurring and bulk payments, run batches, and track status. That prevents someone from diverting individual transactions to a scammer account.
Automated 1099 generation and EFTPS integrations make sure vendor tax data is accurate. Mismatched or missing tax IDs often signal fake vendors.
Dashboard tie it all together. Single payer/Payers dashboard shows you the important data about bills, vendors, and payment methods. If you spot a vendor who suddenly has double the bill count or that surge in check payments, you can use audit logs to trace who approved what, when, and from where the payment was made.
Security and encryption must be non-negotiable. Bank level encryption keeps your data and users safe. It also strengthens your controls against the most devious types of Accounts Payable fraud.
Finally, integrate with your accounting systems. Two-way sync with QuickBooks Online or other platforms. No more manual re-entry. No more data mismatch. This reduces human error which fraudsters love.
Real World Scenarios
1) A scammer posed as a long‑time supplier and requested a bank change by email. The AP team approved it. 4 payments totaling $54,000 went out to a fraudulent account.
How It Could Have Been Prevented
Real time TIN matching and secure W-9 collection during onboarding would have blocked the new account from being accepted. This is one of the examples of Accounts Payable Fraud 2025.
2) An employee colluded with a legit vendor and inflated invoices, splitting the excess. The business lost $40,000 before someone noticed.
How It Could Have Been Prevented
Role based approval workflows and immutable audit logs would have required a separate manager to sign off on the inflated invoice. That extra layer stops AP Fraud Types like collusion kickbacks.
FAQs
1) Why is AP fraud a real worry in 2025?
Because almost 8 out of 10 companies saw payment fraud attempts last year.
2) What simple signs point to AP fraud?
Repeat invoice numbers, round amounts, missing POs, or sudden big payments to new vendors.
3) How does Zenwork Payments help stop it?
Zenwork Payments checks TINs in real time, locks down approvals, and logs every change before money moves.
Conclusion
Accounts Payable Fraud 2025 exploits the minute mismatches or mistakes in vendor onboarding, bill processing, approval flow and payment execution. The most common AP fraud types, bill fraud, ghost vendors, duplicate payments, bank detail fraud and BEC style diversion, thrive when your controls are weak. You need layered defenses: onboarding verification, OCR invoice capture, multitier approval workflows, consolidated payment methods, tax compliance automation, reporting and analytics, encryption and accounting system integration.
Zenwork Payments bundles all of this in a single platform. You get real time TIN matching, customizable workflows, flexible payment options, automated 1099 compliance, robust reporting, bank level encryption and two-way sync with major accounting systems. No more patchwork. No more windows of opportunity for fraud. Build your defenses around those AP Fraud Types. Stamp out Types of Account Payable Fraud before it costs you thousands. That is how you fight accounts payable frauds in 2025.
Don’t Wait. Lock in Your Controls Now!