Procurement fraud rarely announces itself. It often slips in through everyday gaps: rushed approvals, vendor records created without oversight, or invoices that seem accurate at a glance.
Financial losses arise when procurement processes allow purchases to occur outside defined controls without detection.
Fraud prevention starts with a simple principle: make every purchasing step traceable, reviewable, and enforceable. By moving requests out of inboxes and handwritten notes into structured workflows, organizations remove the hiding places fraud relies on.
A procure-to-pay (P2P) system isn’t just a workflow tool—it provides the structure that ensures purchasing follows an auditable path that finance can trust.
Procurement and accounts payable (AP) functions are natural fraud hotspots. They handle cash outflows, manage vendors, and often involve multiple touchpoints — creating potential blind spots.
In PwC’s Global Economic Crime Survey 2024, procurement fraud remains one of the top five most common types of corporate fraud, often stemming from weak internal controls or a lack of process visibility.
Fraud risk grows in several key areas:
Fraud takes advantage of those pockets of low visibility. When purchasing steps occur in unmonitored channels, irregularities are harder to detect, and even small discrepancies can move money without scrutiny.
Building a safer, smarter spend management process starts with visibility, control, and the right technology.
A structured P2P process prevents fraud by eliminating opportunities for off-policy actions. Controls aren’t optional prompts—they are enforced steps built into every workflow. Here’s what that looks like in practice.
When every purchase starts in one place, teams can’t bypass policy for one-off purchases from unapproved vendors. Requests enter the system, are routed according to rules defined by finance, and cannot proceed until the appropriate approvals are completed. This greatly reduces the risk of off-policy purchases or rogue spend.
Invoices that don’t match purchase orders or receipts trigger exceptions automatically, checking quantities, amounts, and vendor records without relying on memory or inbox searches. Potential duplicates—intentional or accidental are flagged immediately, preventing delays and costly errors.
Fraud risk rises when a single individual controls multiple steps in the purchasing process. A structured P2P workflow reduces this risk by enforcing segregation of duties.
Fraxion separates responsibilities—such as creating or updating vendor records from approving requests and invoices—and prevents requesters from processing their own purchases. Every action is logged, giving finance a clear, auditable trail of who did what and when.
When approvers see budget impacts in real time, decisions are based on limits, not habit or pressure. Overruns are flagged immediately, before any money leaves the business, rather than waiting for month-end reconciliations.
Every edit, approval, and status change is recorded automatically, giving you a complete, auditable record that can be reviewed in seconds rather than pieced together from scattered sources.
Creating or editing a vendor record requires permission, and every change is logged. This reduces a major fraud risk: unauthorized entries or small edits that make a fake vendor appear legitimate. With tighter access controls and a clear audit trail, attempts to manipulate vendor data are easier to detect.
A P2P system guides processes and decisions with automated internal controls.
Fraxion was built to help finance teams tighten company-wide processes without slowing down the business. Its controls drive compliance and accountable spending behavior:
See how a structured P2P workflow eliminates the gaps where fraud can hide — book a Fraxion demo and we’ll show you step-by-step.
A P2P system doesn’t replace manual fraud checks—it strengthens them. By enforcing disciplined processes and internal controls, it creates a framework that automatically detects exceptions or high-risk transactions for further review. This focuses finance attention where it matters, saves time, and lets the system handle routine oversight with confidence. Approvals, vendor authorization, three-way matching, and budget checks happen upfront, giving finance clear visibility into potential errors or policy violations before money is committed.
Tighter controls don’t slow purchasing when the workflow handles the heavy lifting. Automated routing, contextual budget visibility, and approvals via a mobile app or Microsoft Teams keep requests moving efficiently. Built-in guidance ensures requests are complete the first time, reducing back-and-forth clarifications. Standardized processes ensure approvers always know what to review, while centralized records and matching prevent errors, avoid lost documentation, and eliminate the need for costly corrective actions — so controls actually remove friction instead of creating it.
Procurement fraud is not limited to large companies. The underlying risks—manual approvals, fragmented systems, and unmonitored vendor changes—exist across organizations of all sizes. Smaller and mid-sized teams can be particularly vulnerable when a single individual controls multiple steps. The risk comes from the lack of controls in process, not the size of the organization.
Procurement fraud can still occur, as no system can eliminate risk entirely. However, a structured P2P workflow dramatically reduces opportunities for fraud by embedding internal controls, enforcing consistent approvals, and providing full oversight of requests, purchase orders, vendor and order edits, and invoices. With every step traceable and exceptions flagged automatically, anomalies are easier to detect, accountability is clear, and blind spots are minimized. Procurement automation strengthens visibility and internal controls, allowing teams to focus their judgment where it matters most.