AP fraud is the most common form of business fraud. These ERP controls prevent it without creating bureaucratic bottlenecks.
Three-Way Matching: The Core Control
Every AP payment should be matched to a purchase order (authorization), a goods receipt note (delivery confirmation), and a supplier invoice (claim). Discrepancies must be resolved before payment — this single control eliminates most AP fraud.
Vendor Master Management
New vendor creation should require independent authorization. Vendor bank account changes should trigger approval workflows and send confirmation emails to the previous bank account. Fake vendor creation is a common fraud vector.
Duplicate Invoice Detection
ERP should automatically flag invoices from the same vendor for the same amount within a defined period — potential duplicates that require investigation before payment.
Segregation of Duties in AP
No single person should be able to create a vendor, create a PO, approve the invoice, and initiate the payment. AP segregation of duties requires minimum 2-3 different people in the payment cycle.
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