On 1 September 2025, a new UK corporate criminal offence will come into force: Failure to Prevent Fraud (FtPF) under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

This represents a significant shift in how organisations will need to manage fraud risk—especially relevant for Accounts Payable (AP) / Procure-to-Pay (P2P) functions, which are often on the front line of interacting with vendors, agents, invoices, payment flows, third parties. Because fraud schemes often exploit weak controls in P2P/AP, this community has a key part to play.

Fraud is an ever-present risk in transactional finance roles, especially within Accounts Payable (AP), where the sheer volume of transactions and the involvement of external vendors can create vulnerabilities. While technological advancements have provided tools to mitigate fraud, building a strong anti-fraud culture is equally critical. This culture starts with awareness and extends through behaviour, processes, and values embraced by the entire organisation.

Here’s some suggestions on how to create an anti-fraud culture that safeguards your AP function:

1. Leadership Commitment and Tone at the Top

The foundation of an anti-fraud culture begins with leadership. When senior leaders demonstrate a zero-tolerance approach to fraud, employees are more likely to follow suit. It’s essential that management consistently communicates the importance of fraud prevention through training, policies, and setting ethical standards. This also means actively participating in initiatives that promote transparency and integrity.

Key actions include:

• Regularly speaking about fraud prevention in team meetings.
• Leading by example in following AP protocols.
• Encouraging open communication on fraud-related concerns without fear of retaliation.

2. Comprehensive Employee Training

Employees in AP and transactional finance roles are the first line of defence against fraud. A well-informed team is better equipped to spot irregularities and suspicious activities. Comprehensive training programs that are regularly updated can help foster vigilance.

Training should cover:

• Common types of AP fraud, including vendor fraud, invoice fraud, and expense reimbursement schemes.
• Red flags to watch for, such as duplicate payments, sudden changes in vendor details, or unusually large invoice amounts.
• Reporting protocols for suspected fraudulent activities.

Equally important is embedding an understanding of the repercussions of fraud, not just for the business but for the individual, including legal consequences and career impacts.

3. Segregation of Duties

One of the most effective internal controls in preventing fraud is the segregation of duties. No single person should have end-to-end control over any financial process, such as vendor onboarding, invoice approval, and payment processing. Splitting these responsibilities between multiple employees reduces the likelihood of fraud being carried out by an individual or going unnoticed.

In practice:

• One team member handles vendor setup, while another manages invoice approvals.
• Implement system-level restrictions so that no single person can complete an entire process alone.
• Ensure a regular review of these duties to avoid collusion between employees.

4. Automated Fraud Detection Tools

Technology plays a crucial role in identifying potential fraudulent activity early. AP automation tools equipped with artificial intelligence (AI) and machine learning can monitor transactions in real-time, flagging anomalies based on pre-set patterns. For example, they can detect duplicate invoices, payments to unregistered vendors, or invoices that deviate from usual spending trends.

These tools should be paired with:

• Routine audits of vendor lists and transaction histories.
• Alerts for specific fraud risk factors like rapid changes in bank account details or suspicious vendor activity.
• The ability to halt payments until anomalies are investigated.

5. Vendor Management and Onboarding Controls

AP fraud often occurs through external vendors, making it crucial to establish strong vendor onboarding controls. A thorough onboarding process that includes validating vendor credentials and conducting regular vendor audits is essential.

Best practices include:

• Verifying the legitimacy of new vendors before they are added to the system.
• Maintaining an updated and accurate vendor master file.
• Regularly reviewing vendor activity and relationships to ensure there are no conflicts of interest or unusual patterns.

6. Whistleblower and Reporting Mechanisms

An effective anti-fraud culture encourages employees to report suspicious behaviour. Implementing a whistleblower program that ensures confidentiality and protection for those reporting potential fraud can greatly enhance internal fraud detection.

Encourage open communication by:

• Offering multiple channels for employees to report suspicious activity (hotlines, online portals, etc.).
• Clearly outlining the process for reviewing and acting on reports.
• Providing assurance that there will be no retaliation for reporting in good faith.

7. Regular Audits and Continuous Monitoring

Audits play a crucial role in identifying gaps in your anti-fraud processes. Regular internal audits of AP systems, processes, and transactions ensure that controls are functioning effectively and provide an opportunity to spot any unusual patterns or weaknesses.

Continuous monitoring efforts include:

• Conducting surprise audits or random checks.
• Reviewing high-risk transactions, such as large or international payments, with extra scrutiny.
• Analysing expense reports and reimbursement claims for potential abuse.

8. Cultivating an Ethical Work Environment

Lastly, fostering an ethical work environment where integrity is prioritised over shortcuts helps prevent fraud from becoming ingrained in company culture. When employees understand the value of honesty and accountability, they are less likely to engage in fraudulent behaviour and more likely to report it when they see it.

This can be achieved by:

• Embedding ethics and values into the company’s code of conduct.
• Recognising and rewarding employees who uphold these values.
• Creating a sense of shared responsibility for fraud prevention across all departments.

Conclusion

Creating an anti-fraud culture in AP and transactional finance roles is not a one-time initiative but an ongoing process. It requires a commitment from leadership, regular training, effective internal controls, and leveraging technology to build a proactive defence against fraud. When every team member is aware, vigilant, and supported by strong processes and tools, the likelihood of fraud can be dramatically reduced, safeguarding both the department and the wider organisation.

By nurturing this culture, AP teams can move beyond just preventing fraud and position themselves as trusted, strategic assets to the business.