Stop vendor fraud before it happens

Mitigate vendor fraud by implementing thorough due diligence during vendor onboarding, establishing clear segregation of duties, and using automated systems to flag suspicious activities like duplicate invoices or unusual payment patterns. Conduct regular audits of vendor files, implement mandatory approval thresholds for payments, and maintain a confidential whistleblower program to encourage reporting of concerns.

To investigate vendor fraud, gather all relevant documentation including invoices and payment records, then analyze for red flags such as sequential invoice numbers or vague service descriptions. Use data analytics to identify anomalies in transaction patterns, interview relevant personnel separately, and maintain strict confidentiality throughout the process. Consider engaging forensic specialists for complex cases requiring deeper financial analysis.

Verify vendor legitimacy by checking their business registration with government agencies, confirming tax identification numbers, requesting references from existing clients, and examining their online presence including professional website and customer reviews. Look for industry credentials or memberships in relevant trade associations, and be wary of vendors with limited online footprints or those offering deals that seem too good to be true.