The invoice looked legitimate. The vendor name matched previous orders, the amount was reasonable, and the urgency felt believable. The AP team approved it within 48 hours. Three weeks later, when the parts never arrived, they discovered the truth: they'd just paid a ghost.
This scenario is playing out across finance departments nationwide. Nearly 71% of AP teams were targeted by a fraud attempt in the past year, with more than one in five experiencing an attack in just the last month. Looking at the broader landscape, 79% of organizations experienced attempted or actual payments fraud in 2024.
Most attempts fell between $10,000 and $50,000, but nearly one in five reached more than $100,000. Fraudsters are also shifting tactics. Checks remain the most-targeted payment method, with 63% of organizations reporting check fraud in 2024.
The impact extends beyond lost dollars. Even blocked attempts consume hours of verification time. Teams must revalidate vendors, double-check approvals, and explain red flags to colleagues. When fraud succeeds, the damage reaches further: credibility suffers, compliance concerns mount, and vendor relationships strain.
Fraudsters understand these vulnerabilities. They're evolving their methods faster than many AP teams can adapt, exploiting manual processes as the weakest link. Synthetic fraud represents their most sophisticated approach yet.
Traditional fraud relies on stealing information from existing accounts. Synthetic fraud is stealthier. Criminals piece together fragments of real data, like an address here and a dormant tax ID there, to build an identity that looks real but is not. That identity becomes the foundation for a “ghost vendor,” complete with fabricated records, bank details, and sometimes even a professional-looking website.
From there, it is a short step to submitting invoices. Because the vendor appears legitimate, payments can be approved without suspicion, especially when AP teams are under pressure to close the books.
AI has changed the game, enabling fraudsters to mimic real business activity with unprecedented accuracy. Generative AI now creates fake documents, deepfake credentials, and invoices designed to evade detection. These AI-generated details make fraudulent activity nearly indistinguishable from legitimate transactions until the damage is done. The fallout reaches far beyond AP, landing directly on the CFO's desk.
Fraud isn't a clerical problem; it's a financial one. A $50,000 ghost vendor payment disrupts cash flow, triggers audit concerns, and erodes leadership trust. The impact compounds: internal investigations consume staff time, external auditors demand explanations, and the finance team's credibility suffers.
Even when a fraud attempt is blocked, the time spent validating it can delay legitimate vendors, creating frustration and straining relationships. Finance leaders end up asking why stronger safeguards aren't already in place.
The threat landscape continues to evolve. Business email compromise remains the most common fraud tactic, but vendor impersonation is climbing quickly. Fraudsters are testing every payment channel, including checks, ACH, and wires, to find the weakest point. For AP teams, the stakes have escalated beyond processing accuracy. This is about the credibility and reliability of the entire finance function.
Consider a mid-sized manufacturer that received an invoice for emergency replacement parts. The supplier logo matched their records, the line items reflected previous orders, and the urgent delivery request seemed plausible given recent equipment failures. The $47,000 invoice cleared approval within 48 hours. Three weeks later, when the parts never arrived, the team traced the payment to a fabricated vendor that had never existed outside their AP system. They had paid a ghost vendor.
This manufacturer's experience reflects a crisis spreading across industries. Synthetic identity fraud has been accelerating at an alarming rate:
While banks have been primary targets for years, AP departments now face equal risk. Fraudsters understand that AP teams process thousands of invoices under tight deadlines, often without automated validation systems. This combination of volume, time pressure, and manual processes makes AP departments attractive targets.
The good news? AP teams don't have to fight back alone. Automation provides layered safeguards that stop fraud before it spreads.
The answer isn't more manual checks on already overworked teams. It's building automated safeguards directly into AP workflows.
AI Powered Data Capture and Verification
Modern AP systems do more than scan invoices. They verify vendor details in real time, cross-referencing tax IDs, addresses, and bank accounts against authoritative databases. When a vendor record changes unexpectedly, or when bank details don't align with the business name, the system flags the discrepancy before payment approval. Risk scoring algorithms identify invoices that deviate from historical patterns, routing only genuine outliers to manual review while legitimate payments flow unimpeded.
Dual Approvals and Workflow Controls
Strong workflows create natural checkpoints without creating bottlenecks. New vendor setups require secondary approval. Bank account changes route to senior finance staff. High-value invoices automatically escalate to leadership review. Most critically, no single individual can both create vendor records and authorize payments to them. When these rules operate at the system level, they enforce consistently across every transaction. They protect against both external fraud and internal collusion without delaying routine, low-risk payments. The system becomes the control, not the individual.
Audit Trails and Anomaly Monitoring
Visibility is critical. Every action, from a vendor detail update to an invoice approval, should leave a digital footprint. This makes it easier to trace issues and also deters fraudsters internally or externally. Pair that with anomaly detection that catches things like invoices just under approval limits, duplicate entries with slight tweaks, or multiple vendors tied to the same bank account, and AP teams can stay ahead of fraud instead of scrambling after it.
The technology matters, but it's only half the solution. Leadership buy-in determines whether these safeguards get implemented at all.
For many AP professionals, the hardest part is not spotting fraud attempts, it is convincing leadership that the risk deserves more attention. Framing the issue in terms leadership cares about is key.
Instead of focusing only on the frustration of chasing down fake invoices, connect it to cash flow, audit readiness, and vendor trust.
Shifting the language helps:
“We’re seeing more suspicious vendor changes. Automated checks and dual approvals would help us reduce losses and prove to auditors that our process is controlled.”
Or:
“We could pilot a capture tool with risk scoring. It flags only high-risk invoices, so most payments flow as normal, but we get stronger protection where it counts.”
When AP staff tie their daily challenges to these larger business priorities, leadership is more likely to listen and act.
When you can demonstrate how fraud prevention supports audit compliance, accelerates payment cycles, and protects vendor relationships, leadership engages differently. The conversation shifts from cost to investment, from nice-to-have to strategic necessity. Fraud prevention doesn't just block scams. It strengthens credibility, improves efficiency, and builds confidence across the entire finance function.
Ghost vendors and synthetic fraud are not theoretical risks. They are happening now, and AP departments are directly in the crosshairs. The sophistication of these attacks has outpaced manual defenses.
The solution isn't choosing between speed and security; it's embedding security into speed. Intelligent AI data capture, automated verification, segregated approvals, and continuous monitoring transform AP from a vulnerability into a defensive asset. Legitimate payments process faster while fraudulent ones get blocked earlier.
For finance leaders, that means fewer surprises, cleaner audits, and stronger vendor trust. For practitioners, it means less firefighting and more time to focus on the work that matters. And when finance leaders ask, “How do we know our payments are secure?” you’ll have the answer, backed by both controls and proof.
onPhase helps AP teams implement these protective layers so finance operations stay secure, efficient, and audit-ready. For deeper insight into emerging threats, explore our article on AI Risk Management: Safeguarding AP from Emerging Cyber Threats in 2025.
Staying ahead of fraud means more than catching the next scam, it is about building lasting confidence in your entire AP process.