A spoofed email. A fake invoice. A routine payment. Just like that, your company is out hundreds of thousands of dollars, and the fraudster is long gone.
This isn’t a one-off horror story. Business email compromise (BEC) and vendor fraud have become some of the most common and costly threats finance leaders face today. In an economy where budgets are tight, teams are lean, and oversight is stretched, fraudsters are taking full advantage.
For companies still relying on manual invoice processing and fragmented approvals, the risk is very real. But it’s not inevitable.
Let’s break down what’s happening, why it’s escalating, and how automation can help finance teams stay one step ahead.
According to the FBI, BEC scams led to nearly $2.8 billion in losses in 2024 alone, and that's only the cases reported to authorities.
In a recent report, 96% of U.S. companies said they had dealt with at least one payment fraud attempt in the past year which is a 71% jump from the year before. Of those attacks, roughly one-third were BEC scams. Fraudsters used spoofed domains, fake CFO messages, and even deepfake tactics.
Meanwhile, a PwC Global Economic Crime Survey confirmed that procurement and vendor payment fraud rank among the top three most disruptive economic crimes worldwide, right behind cyberattacks and corruption.
BEC scams aren't limited to big corporations either. Midsize enterprises and even public sector agencies have increasingly become prime targets due to smaller teams, limited fraud prevention infrastructure, and outdated systems that haven’t kept up with today’s threat landscape.
It’s not just that fraudsters are getting smarter. Economic pressure is playing a big role too.
With inflation, higher interest rates, and downsized teams, finance departments are increasingly operating under tight margins. That can lead to delayed tech investments, reduced oversight, and manual controls falling through the cracks.
The Association of Certified Fraud Examiners (ACFE) reports that organizations lose an average of $1.5 million per fraud case, with total estimated losses exceeding $3.1 billion in 2023. These losses often stem from workforce disruption, budget reallocation, and an overreliance on trust-based processes in departments like AP and procurement.
Turnover adds another layer of exposure. As seasoned employees leave, so do the informal checks and tribal knowledge that often keep fraud in check. Newer team members, while capable, may not recognize red flags or have the authority to challenge inconsistencies.
At the same time, opportunistic fraud isn’t limited to anonymous actors abroad. Insider threats, whether from disgruntled employees or simply overwhelmed team members making shortcuts, are also a growing concern. The fraud triangle framework (pressure, opportunity, rationalization) highlights just how easy it can be for these incidents to occur in environments lacking structure.
Combine that with the accelerated pace of business and the growing dependence on email communication, and you’ve got a perfect storm. When everything from approvals to vendor updates moves through inboxes, it becomes far too easy for a cleverly disguised scam to blend in with legitimate correspondence.
If your AP team is relying on spreadsheets, email threads, and paper checks, fraud is closer than you think.
Here are the main holes fraudsters exploit:
1. No validation at entry
Manual invoice reviews don’t include automated checks, so there’s no guardrail for changed bank details or duplicate invoices.
2. Weak audit trails
Approvals handled through email, chat, or verbal confirmation leave no record, making it very hard to investigate errors or deliberate fraud.
3. Limited visibility
Vendor info scattered across inboxes, file folders, and legacy systems makes it difficult to spot inconsistencies or irregularities.
4. No built-in controls
Without structured workflows, one person might receive, approve, and pay an invoice. That breaks basic segregation-of-duties checks.
Even worse, manual processes often allow exceptions to become the rule. If a policy says dual approval is required over $10,000, but someone is "too busy" and asks to expedite an invoice with a quick email signoff, that one-time workaround becomes a habit. And habits like that are what fraudsters prey on.
Beyond these technical gaps, there's the human element: people are busy, under pressure, and often moving quickly just to keep up. This is exactly the environment fraudsters hope for. It only takes one rushed decision, one unverified change, or one unchecked payment to create a six-figure loss.
These scenarios are all too familiar: A mid-size company processes a routine invoice from what appears to be a known vendor. The email references a recent project, includes a familiar format, and requests payment to a “new bank account.” Because the dollar amount seems in line with expectations, the invoice is paid without extra verification.
Later, it’s discovered that the request came from a spoofed email address, and the money is gone. No alert flagged the bank change, no second approval was required, and there was no audit trail to trace the breakdown.
These situations aren’t uncommon. They’re increasingly common, especially in industries like healthcare, manufacturing, and logistics, where invoice volume is high and vendor networks are complex. The more vendors, the more data, and the more manual touchpoints, the greater the risk.
In another frequently reported scenario, a large organization receives what looks like a legitimate request to update ACH payment info. The sender uses a spoofed domain that’s just one letter off from the real vendor’s address. The branding looks familiar. The team updates the record. A six- or seven-figure payment is routed to the wrong account before anyone notices.
How do you prevent these losses before they happen? The answer starts with automation.
The good news is that you don’t have to rehire your entire team. You just need to modernize your AP process.
Here’s how automation helps shore up the defense:
Automated validation
Smart AP tools automatically flag mismatches, duplicates, or unusual vendor changes before they hit your ledger.
Built-in workflows
You can enforce dual approvals, role-based permissions, and targeted routing using pre-set thresholds and conditions.
Centralized vendor data
A single source of truth ensures accurate, timely vendor records, eliminating fragmented silos and reducing impersonation risk.
Audit-ready logging
Every upload, review, change, and payment is logged with time, approver, and action, making audits quick and accurate.
AI-driven anomaly detection
Many modern platforms also leverage machine learning to flag patterns that seem off, like repeated invoice numbers, irregular payment timing, or sudden changes in vendor geography. These aren’t just nice-to-haves; they’re key to spotting fraud before it lands.
Another benefit? Automation eliminates the guesswork. No more relying on someone’s memory to confirm if a vendor has changed bank details recently. Instead, rules-based checks and system-generated alerts handle that for you.
In a recent PwC survey, only 42% of organizations say they’ve conducted a fraud risk assessment in the last year, highlighting a widespread blind spot that automation can help close.
Fraud prevention is just the beginning. AP automation delivers value far beyond security:
It also strengthens compliance and audit readiness. With digitized workflows and searchable documentation, external audits no longer feel like a scramble. Teams can easily locate approval trails, exception handling, and policy enforcement in seconds, not hours.
As fraud tactics grow more sophisticated, these benefits become essential. Speed and accuracy are no longer competing priorities. Automation delivers both.
Scammers are evolving and sophisticated attacks have before the new norm. But that doesn’t mean you have to be vulnerable.
By automating AP workflows, you’re building a shield around your payments process. You catch red flags before they cost you, ensure oversight without slowing down operations, and protect your finance team from human error and malicious intent.
More importantly, you’re strengthening trust across your organization. When controls are working and fraud risk is low, leadership can move forward confidently, knowing the financial engine of the business is secure.
onPhase empowers the office-of-the-CFO with fraud-resistant invoice matching, intelligent approval workflows, and full audit transparency built right in, so your finance function is secure, efficient, and ready for growth.
No more surprises. No more blind spots. Just smarter, safer finance.
Want to go deeper on how AP teams can take the lead in preventing risk and driving strategy?
Check out this blog on the hidden power of payments. It breaks down how optimizing your payments process can prevent fraud, strengthen supplier trust, and give your AP team more strategic control.