# How Finance Teams Strengthen Payment Fraud Controls - Published: 2026-10-19 - Author: [CFO Drive](https://cfodrive.com/author/cfodrive-com.md) - Topics: [Q&A](https://cfodrive.com/qa.md) - Source: https://cfodrive.com/qa/how-finance-teams-strengthen-payment-fraud-controls/ - Publisher: CFO Drive ### Segregate Duties, Validate Detail Changes The habit that did the most for us is simple: separate who can add a vendor or change bank details from who approves the payment, and always confirm any bank detail change through a number we already had on file, never the one in the email. That one rule blocks most payment fraud attempts, and it costs legitimate vendors almost nothing. To avoid delays, we keep a short list of approved recurring vendors who are paid on a fixed schedule with no extra review. Extra scrutiny goes only to first-time payments, changed details, and unusual amounts. At Simply Noted we are 11 people and self-funded with no debt, so I look at cash closely, and I have found controls should be loud on the exceptions and quiet on the routine. The bonus is communication. When a vendor knows our process in advance (we tell them up front how changes get verified), they do not see a check as a delay, they see it as professionalism. A quick handwritten thank-you note to good vendors does not hurt either. Rick Elmore, Founder/CEO, Simply Noted (simplynoted.com) --- ### Impose a 72-Hour Bank-Change Hold 1\. Stop treating all payments with the same level of suspicion. The volume has been going up at TradingFXVPS as we add more locations around the world. Most of the payments to data centers, bandwidth providers and hardware suppliers are routine and paid from the same account that we use to pay the same vendor each month for the same amount. We have only one approval for these types of payments. The few instances of fraud are when there is a change to a vendor's information, a change to a bank account, a payment that is outside of the normal range for an invoice, or if someone has marked the payment as urgent. Fraud occurs when someone attempts to defraud someone else via a change request rather than by sending a false invoice. 2\. 72 hours hold on payment to recently changed bank details. We call the contact already on file for the vendor record, not a number in an email requesting the change. The person that added a new vendor record, or changed a payment detail for an existing vendor, cannot approve payment within 72 hours of making said change. We almost got scammed by a "colocation provider" sending an email with new wire instructions, correct invoice # and a proper looking signature block. The callback to verify the change was sufficient to put the scammer off within 5 minutes. The hold on payment to changed details is to delay payment to a vendor for 3 days once, not to have them not get paid at all. A redirected wire is lost forever and almost never recovered by a bank. --- ### Call to Confirm New Banking Fraud was a problem, but adding delays wasn't an option. Now, any vendor banking change needs an email confirmation plus a quick phone call. It takes under five minutes and has already caught people trying to scam us. Our regular vendors don't even notice, since we only check new details. My rule? Make it simple for your actual partners, but a pain for anyone trying to cheat you. --- ### Route Exceptions Through Risk-Based Review I set approval limits by payment type and dollar amount to concentrate review where risk is highest. I make payment processing delays measurable so thresholds can be adjusted if legitimate transactions are held too often. Once details are confirmed, I process verified vendor invoices normally while routing exceptions and changes to a separate queue. AP also reviews any changes made to the submission and, as applicable, whether any match exceptions have been approved. Segregation of duties is important: the person approving an invoice should not necessarily be the same person releasing the payment. For higher-value or higher-risk transactions, a second authorized reviewer can provide an additional control without slowing every routine payment. If the usual approver is unavailable, approval authority should be reassigned according to established access and authorization procedures rather than informally transferred. One of the bigger risks is a fraudulent request to change a vendor's bank account or payment instructions. I would treat those changes separately from routine invoices and independently verify them using a known vendor contact or another trusted source, rather than relying on the contact information contained in the change request itself. Workflow and segregation of duties add accountability, but they do not replace independent verification of vendor payment details. Dual control is most useful for sensitive vendor-master changes and higher-risk payments, where one person initiates the change and another authorized person reviews it before funds are released. --- ### Reject Urgency as a Control Bypass We adopted a practice of separating urgency from authority. No payment request became more credible simply because it was marked urgent by email, message, or phone. Urgency could change the order in which a request was reviewed, but it could not remove the required checks. This habit is valuable because it addresses the human pressure behind many payment errors. A rushed team member may overlook a mismatched invoice or accept a request that appears to come from an executive. By documenting that urgency never substitutes for verification, teams gain permission to pause without feeling they are obstructing the business. Legitimate vendors usually appreciate clarity when the process is explained. Fraud attempts tend to weaken when the requested shortcut is unavailable. --- ### Stop Phishing With Multifactor Authentication Having led Netsurit for 27+ years protecting organizations from over 11,627 security incidents every quarter, I've seen that relying on manual checks inevitably bottlenecks operations during high-volume periods. The key to maintaining speed is eliminating manual friction by securing digital workflows and communication channels directly. To keep transactions fast and auditable, we implement automated workflows using Microsoft Power Automate, similar to how we reduced query processing delays for Novo Nordisk from over 48 hours to 3 minutes. Automated processing ensures routine, verified requests move immediately without waiting on repetitive human reviews. The single most impactful control is enforcing multi-factor authentication paired with dedicated anti-phishing and account takeover protection across all email accounts. Stopping compromised communications at the inbox level eliminates fraudulent diversion risks entirely, allowing legitimate payments to clear without added delays. --- ### Screen High-Value Buyers by Video At Wedding Rings UK, we started noticing people trying to buy expensive rings with stolen cards. So now, for big orders, we have a quick phone or video call to verify the buyer. This lets us ship right away to real customers using insured shipping and keep all the details documented. It takes a little extra time, but our real customers get their rings faster and we know we're sending them to the right person. --- ### Audit Supplier Files Each Quarter The fraud gets bad when business hits peak travel season at Bell Fire and Security. Since we identified a fraudulent invoice through a dead account, we've been doing quarterly scrubs: deleting duplicate vendors, putting older accounts on hold, and marking accounts that increase in price or volume abruptly. It's just basic, but it prevents fraud and ensures payments don't stop. --- ### Establish Predictable Authorization Windows On Acquire.com I learned to design a payment process that was a real payment process. We had fixed windows and two approvals on every exception. We accepted a few random solutions before finally landing on this one. It was designed to be acceptable in terms of the normal business flow, but still bring a red light to any questionably fraudulent transactions. So here's my tip: build a fairly predictable approval process, and ring your vendors if you make them wait. --- ### Tie Every Payout to Source Records My recommendation is to reconcile before you pay, every time you pay. At CuraDebt, we pay various marketing partners, and we have two really big standards: every partner gets paid exactly the right amount, and every payout ties back to our tracking, so we can track everything in a very detailed format. When the numbers are reconciled before money goes out, partners don't have to wait. If there's any question, it's always easy to clarify and track back to the original numbers, and everything is correct from the starting point. With this, fraud is very hard or impossible, because everything is reconciled each time a payment goes out. Eric Pemper, Founder & Managing Member, CuraDebt --- ### Release Funds Only After Shipment Matches Here's what worked for us. We set up a pay-what-we-ship rule for our eCommerce system. The automated check only releases payment when the shipped items, SKUs, and tracking all match. This cut down on fraud and disputes. Honest vendors sail through while weird patterns get flagged automatically. Start with one rule like this first, then add more. It keeps things secure without slowing down the good guys. --- ### Escalate Only Unusual Bookings We changed how we do fraud checks. Now the system only looks for really weird stuff, like a credit card from another country booking a local tour. Only those bookings get flagged for a person to review. Everyone else gets their confirmation instantly. This stopped us from getting hit with fake charges without slowing down regular customers. The trick is to only flag the outliers. --- ### Inspect Master Data for Irregularities We treat the vendor master file with the care given to the bank account because weak records can open the door to fraud. We review vendors, bank details, duplicate addresses, and reactivated accounts to spot unusual activity. We keep the review focused so the team can see records needing attention. We ensure the report reaches someone outside the group. This review helps us catch problems before money leaves, rather than relying on payment checks. We know a payment can look normal when the vendor record behind it has changed. We therefore protect the vendor record as part of our payment controls. We find that a simple review can strengthen oversight without extra work. --- ### Crosscheck Change Logs Before Disbursement Payment integrity depends on who can alter vendor master data. In organizations, urgency that speeds onboarding also creates a route around controls, particularly when teams can request and approve amendments through channels. Restricting edit rights is useful, but the stronger design is making change attributable to an owner and visible to a second function. Our valuable habit is reconciling the change log against the payment file before releases. The review is not a approval of every invoice. It asks whether any recipient, account, or remittance instruction changed, then tests those changes separately. This catches manipulation at the point where fraudsters create leverage, without burdening established vendors with repetitive checks. --- ### Automate Verified Supplier Setup We switched to Zoho for onboarding at Patron Accounting LLP and it solved our problems. Now we collect GST, PAN, and KYC details first, so we only pay verified vendors. Last year's growth overwhelmed us with manual checks, but automation cut our mistakes and caught issues we used to miss. I set incomplete profiles to auto-expire, which stopped us from paying the wrong people. Regular reviews now catch problems early without slowing down legitimate vendors. --- ### Use Positive Pay on Checks I would start by reducing reliance on payment methods that expose reusable account information. For eligible vendors, controlled electronic options such as single-use virtual cards can often be configured to restrict a payment by amount, vendor, or validity period. For checks that remain necessary, the one control I recommend is payee positive pay. When checks are issued, finance sends the bank an issued-check file containing details such as the check number, amount, and intended payee, so discrepancies can be flagged when a check is presented. You can generally set spending limits and expiration dates depending on the virtual-card program being used. This can reduce the usefulness of stolen payment credentials because the card details may be restricted to a specific transaction or period. For higher-risk or unusual payments, requiring a second authorized reviewer can add another layer of control without slowing every routine transaction. Depending on the nature of your transactions and vendor relationships, certain payment methods may or may not be relevant. It requires balancing security, transaction costs, vendor convenience, and operational complexity. Positive pay is a fraud-control service in which the bank compares presented checks against the company's issued-check file and sends exceptions back for review. Finance can then approve legitimate exceptions or instruct the bank to return suspicious or incorrect items. This creates a focused review process rather than delaying every legitimate payment. --- ### Divide Initiation From Authorization Sumsub is one of our customers, so we've seen this problem from both sides: they build fraud infrastructure, and we've had to build our own internal controls as a bootstrapped company with no finance team. The one habit that made the biggest difference was separating payment approval from payment initiation entirely. Two different people, two different login credentials, no exceptions. When we were smaller, I was doing both, and a spoofed vendor email nearly got through because the "confirm" step was just me clicking again. Splitting the roles added maybe 4 minutes to each payment cycle and stopped that category of risk completely. The second thing was a callback rule: any new vendor or changed bank details required a phone call to a number we sourced independently, not from the email chain. Doesn't matter if the request looks perfect. The call is mandatory. We've had two cases where that step caught something that looked completely legitimate on paper. Neither of these slows down established vendors at all. The friction is front-loaded at onboarding and at any change event. Once a vendor is verified and stable, payments move fast. The control should live at the moment of change, not at every recurring transaction. --- ### Adjust Rules With Weekly Metrics At Instawork, I started tracking a weekly risk report with approval rates, manual reviews, disputes by partner, and payout times. It shows me exactly where things are getting stuck, so I can tighten rules only where fraud pops up instead of slowing everyone down. When we saw disputes spike with one new partner, I adjusted their settings, but our good vendors didn't notice a thing. Staying close to the data helps you fix small problems before they become real headaches. --- ### Apply Automated Three-Way Matching Leading the cybersecurity team at VpnGenix, we found automated three-way matching was the best way to spot fraud without slowing down payments. Once we tuned the system for our industry, daily vendor payments flowed smoothly and only exceptions needed a manual review. This approach is a lifesaver when payment volumes spike and you just can't check everything by hand. My advice? Customize the automation for your sector's specific risks. You'll save time and avoid so many problems. --- ### Enforce Role-Based Access Rights The way to tighten payment controls without slowing legitimate vendors is to move the control upstream. Much of the risk is decided before the payment run, at the moment someone approves a purchase, a contract, or a supplier record. If only the right people can approve, you need fewer manual checkpoints at the payment stage. I work on the buyer side of public-sector procurement and worked on access design and integrated testing for a sourcing, contracts, and supplier management platform connected to our ERP. Payments happen downstream of that system, but the approvals that authorize them happen inside it. The one control that made the biggest difference: approval rights are derived from roles, not granted by hand. Each user's ability to view, manage, or approve is driven by their role assignment in the ERP and their department, and approval workflows route automatically based on department and division. Sensitive actions are limited to specific user groups. Access is maintained in one authoritative place and replicated, rather than adjusted manually in each system, where exceptions quietly pile up. Legitimate vendors barely feel this. Their submissions route straight to the correct approver with no added review step. The friction lands only on someone trying to act outside their authority. The habit that keeps the control honest: test the "no" path. Most testing proves a system does what it should. During integrated testing, I wrote test scripts specifically designed to attempt unauthorized approvals, so the system had to prove it would refuse them. A control you have never tried to break is an assumption, not a control. My advice to finance leaders: before adding a new review step, ask where the delay will land. If it lands on vendors, look for a way to enforce the same rule through roles and routing instead. --- ### Review Prior-Day Bank Activity Hello, I'm Timothy Bakels, B.A., the CFO of Aura Recovery Center, a southern comfort recovery center for healing and restoration in Scottsville, KY. During volume spikes, I add review capacity focused around scheduled batches rather than relaxing controls or diverting payments into a slower process. I also recommend reconciling the bank's prior-day activity every business morning, which gives finance a faster signal that an unauthorized or misdirected payment may have occurred without delaying vendor payments. Processes should be designed to anticipate fraud and deploy a combination of preventive controls and detective controls. First, the first step in invoice processing is to collect all of the bills from vendors in one place for invoice capture and validation. Then, authorized users should be limited and given specific permissions by account and function. And, different people should be approving your invoices and payments. Only invoices that pass the required checks should advance automatically. By working through bank reconciliations daily, it is possible to identify potential fraud, errors, or cash discrepancies sooner than with a monthly reconciliation process. Business owners can also find and correct bank errors quicker than using a monthly reconciliation process. For checks, a positive-pay service can compare checks presented for payment against an issued-check file provided by the business, helping flag mismatches for review. --- ### Deploy AI Against Anomalies We built an AI tool at SIGNLD that watches for weird payment patterns. Everyday invoices fly right through, but the system flags anything odd. Now our executives only get pinged when something actually needs their attention, instead of sifting through every single transaction. It might not catch every outlier, but this approach keeps our payments safe without slowing down the vendors we trust. --- ### Classify Approvals by Risk Tier The one habit that made the biggest difference was tiering vendor approvals by risk level instead of treating every payment the same. At Softline Solutions I manage a GCP platform for 1,500+ client accounts, and we process a lot of automated payments through third-party integrations. Early on we had a single approval flow for everything, which meant legitimate recurring vendor payments sat in the same queue as first-time requests. We split it. Known vendors with a clean history above a certain threshold go through automated checks only, things like matching the invoice amount against the contract, verifying the bank details haven't changed. New vendors or payments that look unusual (amount spikes, changed routing numbers, first invoice from a new entity) get routed to manual review. The key was building the risk scoring into the system itself rather than relying on people to catch things. A person reviewing 200 invoices will miss the one where the bank account changed. An automated flag on that specific field won't. --- ### Examine Daily Exception Reports At BuyBoxr, we look at a simple dashboard in Zoho each day that flags weird payments. This habit lets us spot the outliers without slowing down our routine vendor payouts. We once caught a vendor getting refunded twice for the same order, something automation would have missed. Fixing that saved us money and avoided a really awkward conversation. A simple automated report, if someone actually checks it regularly, catches mistakes without adding approval steps. --- ### Link Bills to Authorized Orders Require each supplier invoice to MATCH an authorized purchase before payment is released. Invoices for lights, cables, and installation supplies can mount up during the hectic holiday lighting season. Verifying that the materials, quantities, and prices are accurate without needing needless approvals for regular payments should be the top priority. Rather than slowing down reputable suppliers, effective payment controls should prevent dubious charges. Someone should verify that the materials were ordered and received, that the price is in line with the agreement, and that the invoice hasn't already been paid. Payment proceeds if everything checks out. ANYTHING THAT DOESN'T MATCH IS EXAMINED FIRST. --- ### Related Articles - Stop Payment Fraud with Practical Treasury Controls - Close the Books Faster in Finance Without Sacrificing Control - 9 Technology Solutions That Improved Real-Time Cash Flow Visibility