Verify Before You Pay: A Simple Step That Can Save Your Business Thousands

In today's digital business environment, convenience often drives the way we process payments. Invoices arrive by email, vendors update banking information electronically, and transactions can be approved with just a few clicks.

Unfortunately, cybercriminals know this too.

One of the fastest-growing forms of business fraud involves fraudulent vendor payment requests, often referred to as Business Email Compromise (BEC) scams. These schemes are designed to trick businesses into sending legitimate payments to fraudulent bank accounts—and they are becoming increasingly sophisticated.

How the Scam Works

A fraudster gains access to or closely mimics a vendor's email account and sends what appears to be a legitimate request to update payment information.

The email may look authentic. It may contain the vendor's logo, signature, and even reference recent projects or invoices.

Without realizing it, an employee updates the vendor's banking details and processes a payment. The money is then sent directly to the fraudster's account, often making recovery difficult or impossible.

In many cases, businesses don't discover the fraud until the real vendor follows up about an unpaid invoice weeks later.

Why Verification Matters

The good news is that many of these scams can be prevented with one simple step:

Always verify payment-related changes through a known phone number or trusted contact before making updates.

Not the phone number included in the email.

Not a number provided in an attachment.

A phone number you already have on file or have independently verified.

A five-minute phone call can provide peace of mind and potentially prevent thousands—or even tens of thousands—of dollars in losses.

Warning Signs to Watch For

While fraudulent requests are becoming harder to spot, there are several red flags that should trigger additional verification:

• Requests to change banking information
• Urgent payment requests requiring immediate action
• Emails containing unusual wording or grammar
• Last-minute changes to payment instructions
• Requests that bypass normal approval procedures
• New banking information for long-standing vendors

If something feels unusual, pause and verify before proceeding.

Strengthen Your Internal Controls

Verification should be part of a larger payment approval process designed to protect your business from fraud.

Consider implementing the following safeguards:

Require Dual Approval

Large payments or banking changes should be reviewed by more than one person before being approved.

Document Verification Procedures

Create a standard process for validating vendor information and ensure all employees follow it consistently.

Limit Access to Payment Changes

Only authorized personnel should have the ability to update vendor banking information.

Train Your Team

Employees involved in accounts payable should regularly receive training on common fraud tactics and cybersecurity best practices.

Small Effort, Big Protection

Fraud prevention doesn't always require complex technology or expensive software. Sometimes the most effective safeguard is simply slowing down and confirming a request before acting.

A five-minute verification call can save your business from financial loss, operational disruption, and countless hours spent resolving a preventable issue.

Is Your Payment Approval Process Secure?

If you're unsure whether your current payment procedures adequately protect your business, now is the time to review them.

Contact Ladell CFO Services to discuss practical ways to strengthen your internal controls, reduce fraud risk, and safeguard your company's finances.