People often imagine fraud as an insider job; someone in the accounting department exploiting access, bypassing controls, or quietly altering records. Internal fraud does happen, but the modern landscape is much broader. Outside actors generate just as much risk, and in many organizations, they are getting better at exploiting weak workflows. Phishing schemes, check fraud, identity theft, fake vendor creation, real-time payment scams, and refund abuse all show how vulnerable a business becomes when workflows are unclear or fragmented.
The latest Global Payments and Fraud Report confirms how widespread this threat has become. 98% of merchants experienced at least one type of fraud in the past 12 months. Real-time payment fraud affected 45% of merchants, refund and policy abuse hit 57%, phishing attacks impacted one-third, and card testing and identity theft remained common issues. These are not edge cases. They are everyday threats that exploit gaps in process design.
This is why workflow design is central to fraud prevention in accounting. A proper workflow does not just organize tasks; it controls how money and information move. It clarifies who touches what, when they touch it, and what records must exist. When a team follows that structure, opportunities for fraud collapse, both internally and externally.
Accounting fraud thrives where workflows break down
Fraud, in practice, is quite ordinary. It thrives in mundane places: a missing approval, a skipped reconciliation, a vague process, a single person with too much control. Most internal issues stem from these small cracks. Think of situations where an employee can create a vendor, enter a bill, and approve the payment. Or someone who reconciles bank statements and posts journal entries. Or a manager who approves their own expenses.
But outside threats slip through the same cracks. When processes are loose, fraudsters have room to work. Phishing attempts succeed because there is no clear procedure governing invoice review or vendor change requests. Check fraud works because no one is consistently reconciling cleared checks. Real-time payment scams succeed when outgoing payments are not verified by a second person. Refund abuse grows when the documentation behind refunds is scattered or inconsistent.
The report highlights exactly this problem. Refund and policy abuse, false claims of goods not received, manipulated tracking information, and returns of used or counterfeit goods have risen sharply and now affects most merchants. These schemes exploit weak documentation and unclear approval workflows.
A clear workflow forces everyone, inside and outside the organization, to pass through the same guardrails. That structure is the foundation of solid fraud prevention in accounting.
Mapping the full financial lifecycle
Every accounting department and bookkeeping firm moves through predictable financial cycles. Accounts payable and receivable, payroll, reconciliations, reporting, month-end closing, and year-end tasks. Each has high-risk choke points. A workflow identifies these choke points and places required steps around them.
Vendor management offers the cleanest example. A healthy workflow separates vendor creation, invoice entry, approval, and payment. The person who enters vendors cannot approve payments. The person who enters invoices cannot release funds. And the person who approves payments cannot reconcile the bank account.
This protects the business from more than internal misconduct. It protects it from outside attackers who attempt to impersonate vendors. In many phishing schemes, fraudsters send emails requesting that payment information be changed. When a workflow requires independent verification, such as contacting the vendor using a stored phone number, these attacks fail.
Real-time payment fraud, which surged to the second most common fraud category in the report, shows how critical this structure is. Real-time payments settle instantly, so there is no retrieval window. A workflow that enforces verification, dual controls, and documented authorization becomes the only barrier between a business and irreversible loss.
The same principles apply to check fraud. Physical checks remain vulnerable because criminals can intercept, forge, or wash them. A workflow that includes daily online review of cleared checks, separation of check printing from mailing, secure handling of check stock, and immediate investigation of anomalies catches fraud before it becomes costly. Or, take it one step further and greatly reduce the danger of check fraud with online payment systems like BILL.
When mapped thoroughly, workflows seal the cracks that both internal and external actors exploit.
Documentation removes ambiguity
One of the most underrated forces behind fraud prevention in accounting is documentation. Clear instructions for each task reduce variability, which in turn reduces opportunity. People are natural improvisers. If instructions are vague, they will complete a task in a way that feels efficient. Those variations, even when harmless, make fraud harder to detect.
Fraudsters prey on inconsistency. The report’s discussion of refund abuse demonstrates this. False claims and manipulated returns succeed because documentation of delivery, return condition, or customer communication is incomplete or inconsistent. When documentation is standardized, abuse becomes easier to challenge and harder to hide.
Workflows that require specific documentation at each step build a trail. Without that trail, fraud becomes harder to identify, and disputes become harder to fight.
Role clarity eliminates hidden power structures
Fraud often slips through informal authority. A senior employee overrides a control. A junior staffer feels uncomfortable questioning a missing approval. When processes depend on personalities instead of systems, risk grows.
Workflow shifts work from personality-driven to role-driven. Tasks, approvals, and verifications follow the system. A payment cannot be issued without the correct approval. A reconciliation cannot skip a month. A refund cannot be processed without documentation.
This is not bureaucracy. It is structure. It is fraud prevention in accounting implemented through everyday habits.
Automation strengthens oversight
Automation provides consistency, which is essential to fighting both internal and external fraud. Modern workflow tools enforce required fields, prevent skipped steps, record who performed each action, and maintain complete histories.
Automation does not replace oversight. It enhances it. The report shows how merchants are increasingly adopting AI and machine-learning-based fraud tools. Over half of merchants now use generative AI to detect suspicious behavior. Automation reduces noise and highlights anomalies. It keeps fraud from being buried in volume.
In accounting workflows, automation ensures that a payment cannot move forward without proper approval, a reconciliation cannot be saved without matching balances, and an invoice cannot be processed without required documentation. These features frustrate both internal shortcuts and external attacks.
Transparency changes behavior
Fraud thrives in shadows. When work is visible—tasks, assignments, approvals, and documentation—behavior changes. People are less likely to attempt misconduct when they know their work can be reviewed. Outside attackers are thwarted when dual controls, cross-checks, and verifications are visible parts of the workflow.
The report’s data reinforces this point indirectly. Merchants with stronger fraud oversight experience dramatically lower fraud rates and higher dispute win rates. Better visibility and better systems lead to better outcomes.
Transparency creates cultural friction against fraud. Workflows make transparency normal.
Building workflow as long-term protection
A business without a documented workflow relies on memory, habit, and trust. A formal, documented workflow relies on structure. The second is far safer. Fraud prevention in accounting is not simply about catching fraud. It is about designing an environment where fraud rarely has a place to grow.
A robust workflow system distributes authority. It makes every step traceable. It standardizes documentation. It verifies high-risk activity. It blocks payments that lack proper review. It shows who did what, when, and why.
Modern threats make this indispensable. External fraud is increasing in sophistication. Real-time payment fraud, refund abuse, phishing, identity theft, and card-testing attacks are hitting more organizations every year. Check fraud, one of the oldest attacks, still thrives where controls are weak.
A proper workflow system does not eliminate fraud. But it makes fraud much harder, much riskier, and much easier to detect. In the accounting world, that is the most meaningful protection a business can build.
