Vendor Onboarding and Bank-Detail Fraud: How to Stop Payments Going to the Wrong Account
One email saying 'we have changed our bank account' can redirect a payment. A practical vendor onboarding and change-control process that keeps your vendor master clean and your payments safe.
The most expensive email in accounts payable is also one of the shortest: “Please note our bank account details have changed. Kindly update your records.” It looks routine. If it is acted on without a check, the next payment goes to someone else’s account, and recovering it is difficult.
Strong vendor onboarding is the quiet control behind this. A clean vendor master makes a suspicious change obvious, and a defined change process stops it from slipping through.
Why the Vendor Master Is a Control, Not Just a List
Every payment starts with a vendor record. If that record is incomplete, duplicated, or editable by anyone, then every downstream control (approvals, matching, payment runs) is working from unreliable data. Most diversion fraud, duplicate payments and compliance misses can be traced back to the vendor master being treated as admin rather than as a control.
What to Collect at Onboarding
Ask for a consistent set of documents every time, and don’t make exceptions for “known” suppliers:
- Legal name and constitution (company, firm, proprietorship, individual).
- PAN, verified against the legal name.
- GSTIN, verified on the GST portal for status and name. This also matters for your input tax credit.
- Bank details from a cancelled cheque or bank letter, ideally verified with a small test credit or a bank-account verification service.
- Named contacts for payments and queries, and a registered address.
Separate the People
A basic rule that prevents most internal fraud: the person who creates or changes a vendor shouldn’t be the person who approves or releases payments to them. In a small team that may mean a second person simply reviewing every new vendor and every change before it goes live.
A Change-Control Process for Bank Details
Treat any request to change bank details as high risk, whatever its source:
- Don’t act on an email alone. Even if it appears to come from a known address, addresses can be spoofed or accounts compromised.
- Call back on a number you already hold, not one in the request, and speak to a known contact.
- Get the change in writing on the vendor’s letterhead, signed, and verify the new account the same way as at onboarding.
- Have a second person approve the master-data change before it takes effect.
- Hold the first payment to a changed account for review, or send a small test amount first.
- Keep an audit trail of who requested, verified and approved every change.
Red Flags Worth Training Your Team On
- Urgent tone, “payment is overdue”, or pressure to bypass the usual process.
- A new account in a different name, city or bank from the one on file.
- A change request that arrives right before a large payment run.
- Contact details that differ slightly from earlier correspondence.
- A vendor who can’t be reached on the number you already have.
Duplicates Are a Vendor-Master Problem Too
The same supplier entered twice under slightly different names (“Acme Traders” and “ACME Traders Pvt Ltd”) is how duplicate invoices and duplicate payments happen. Periodic de-duplication of the vendor master, matched on PAN and GSTIN, removes one of the biggest sources of leakage. Our guide to duplicate invoice detection covers the invoice side of the same problem.
Where Billacle Fits
The phone call and the policy are yours. What software can do is make the surrounding controls consistent. Billacle validates vendor tax IDs as part of invoice validation, catches re-sent and near-duplicate invoices with content-level duplicate detection, and uses AI risk scoring to surface anomalies. Every action is recorded in a full audit trail showing who did what and when, and invoices are routed through your approval workflow so nothing is released without the right person’s sign-off.
Protect the Payment Before You Release It
Billacle brings invoice capture, approvals and an audit trail into one workflow so payments are visible.
Book a free, 30-day pilot and see a controlled vendor-to-payment flow.
Get in Touch
Website: https://billacle.com/
Book a Free Demo: https://billacle.com/book-demo/
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Phone: +91-9171905680