AP/AR Security Best Practices

Why AP/AR Security Matters More Than Ever

Every business depends on healthy cash flow. But in today's digital-first environment, accounts payable (AP) and accounts receivable (AR) workflows are prime targets for cybercriminals. From fraudulent invoices to billing schemes and stolen checks, attackers are finding new ways to exploit financial processes.

For CFOs and controllers in New Jersey and Manhattan, the stakes are especially high. CRE firms, law offices, consulting groups, and financial services companies process millions in payments each month. Without strong AP/AR security, a single lapse can lead to lost funds, reputational damage, and even denied insurance claims.

What Are the Best AP/AR Security Practices?

The best AP/AR security practices combine fraud prevention with banking safeguards. Businesses should implement fraud prevention strategies, such as positive pay banking, secure vendor portals, secure payment approvals, and ongoing staff training. Together, these controls reduce payment fraud risk, protect receivables, and ensure compliance with cyber insurance and industry regulations.

The Growing Threat Landscape in AP Fraud

AP and AR teams once worried mostly about human error. Today, cyber threats are the bigger risk. Here are the most common attack types:

• Business Email Compromise (BEC): Criminals impersonate executives or vendors to trick staff into wiring funds.
• Invoice Fraud: Fake or altered invoices that look legitimate get processed and paid.
• Check Fraud & Check Washing: Physical checks stolen from mail are altered and deposited into fraudulent accounts.
• Accounts Receivable Hijacking: Criminals redirect client payments by compromising email or banking details.
• Insider Threats: Employees with access to AP/AR systems manipulate payments for personal gain.

According to the Association for Financial Professionals, 65% of organizations reported attempted or actual payment fraud in the past year. This is not a fringe problem; it's a daily risk for firms of all sizes.

Why CRE and Professional Services Are High-Value Targets

Commercial real estate, financial firms, and professional services organizations make especially attractive targets because:

• High Transaction Volume: Monthly rent collections, vendor payments, and contractor invoices.
• Complex Vendor Ecosystems: Landscapers, maintenance providers, law partners, and consultants who all have access to sensitive workflows.
• Large Payment Sizes: Even a single fraudulent wire can exceed $100,000.
• Outdated Processes: Many firms still rely on emailed PDFs and paper checks, creating opportunities for interception.

At IBS, we see this pattern again and again: firms think fraud "won't happen to them" until it does.

Best Practices for AP/AR Security

Here are the strategies every CFO and controller should consider implementing:

1. Strengthen Authentication and Access Controls

• Require multi-factor authentication (MFA) for all banking and AP/AR systems.
• Limit system access to authorized staff, with role-based permissions.
• Regularly audit who has access and remove inactive accounts immediately.

2. Implement Positive Pay Banking

• Work with your bank to use positive pay, which verifies checks against an approved issue file.
• Enable confirmation of payee service and verification (not just check numbers and amounts).
• Monitor for exceptions daily and resolve discrepancies immediately.

3. Vendor Fraud Prevention

• Maintain an up-to-date vendor master file integrity with verified contact information.
• Require call-back verification for new or changed payment instructions.
• Use a segregation of duties model so no single employee can set up and approve a payment.

4. Secure Accounts Receivable Processes

• Encrypt client data, including payment instructions and account numbers.
• Avoid sending invoices with sensitive details via unencrypted email.
• Encourage electronic payments over paper checks, which are prone to theft and washing.

5. Train Employees to Spot Fraud

• Conduct phishing simulations to build awareness of email scams.
• Teach staff how to validate suspicious requests (e.g., urgent wire transfers).
• Make reporting easy, because staff should never fear escalating concerns.

6. Align with Cyber Insurance and Compliance Requirements

• Review policy terms carefully: many insurers require MFA, vendor verification, and documented controls.
• Collect and store evidence of compliance to ensure claims won't be denied.
• Stay current with evolving regulations like the New York SHIELD Act and New Jersey's new PII law.

7. Use Technology to Automate Safely

• Deploy AI tools to scan invoices for anomalies, duplicates, or altered data.
• Automate approval workflows with built-in compliance checks.
• Monitor for unusual transaction patterns that may indicate fraud.

IBS's Approach to Accounts Payable Fraud Prevention

At Integrated Business Systems, we've helped firms across Manhattan and Northern New Jersey secure AP/AR workflows by combining technology, process improvements, and training. Our approach includes:

• Workflow Assessments: Reviewing how invoices, checks, and receivables are processed.
• Control Design: Building safeguards like approval workflows, MFA, and positive pay into daily operations.
• Banking Integration: Working directly with financial institutions to enable fraud-prevention features.
• Staff Training: Keeping your team alert to evolving scams and social engineering tactics.
• Ongoing Monitoring: Providing compliance reporting and security audits that align with cyber insurance policies.

Why Firms Trust IBS

• CRE and Professional Services Expertise: We understand your industry's unique vendor and payment processes.
• Compliance Simplified: Our solutions align with your cyber insurance policy, not just regulations.
• 3-Minute Response Guarantee: When you need support, we answer fast.
• 46+ Years of Experience: A trusted partner to NJ and Manhattan firms since 1977.

Key Takeaways

• AP/AR fraud is one of the most common threats facing businesses today.
• Positive pay, MFA, and vendor management are essential safeguards to avoid both external and internal fraud.
• CRE and professional services firms face unique risks due to large payments and complex vendor ecosystems.
• IBS helps firms implement tailored AP/AR security and fraud prevention solutions and protects compliance.

Don't wait for a fraudulent invoice or stolen check to derail your cash flow.

Schedule your free discovery call with Integrated Business Systems today to learn how AP/AR security best practices can protect your business, your clients, and your reputation.

Click Here or give us a call at (973) 575-4950 to Book a FREE Consultation