No matter how careful you may be in managing your company’s accounting systems, it’s all too easy for someone to slip in a phony vendor or two. It happens at companies of all sizes, but there are steps you can take to detect and altogether prevent payments to fictitious vendors.
How does this crime begin? In simple terms, a fraudulently created invoice is usually submitted for payment by the internal accountant, clerk or controller for goods that were never received or services that were never rendered. Services are typically more likely to be the item charged as it is easier to track the receipt of a tangible item than a service. With a service, there is usually not a packing slip evidencing the shipping and receipt of goods.