Supplier onboarding best practices to prevent AP fraud

Most finance and operations leaders believe supplier risk is controlled at the point of payment. That’s where approvals live, where fraud tools are deployed, and where governance is most visible. But there’s a critical flaw in that assumption when it comes to supplier onboarding.

What is supplier onboarding?

Supplier onboarding — also referred to as vendor onboarding — is a critical financial control that governs how organizations collect, validate, approve, and maintain third-party data before authorizing payments in accounts payable systems. However, across many organizations, this function is often fragmented, manual, and inconsistently governed. It’s often decentralized, lightly standardized, and treated as an administrative necessity rather than a strategic control.

The irony is hard to ignore. Companies invest heavily in downstream controls while leaving the front door partially open. Yet the reality is that most AP risk, inefficiency, and fraud exposure don’t start at payment. They start when a supplier is onboarded. It doesn’t have to be that way.

Limited visibility creates enterprise risk

From an executive vantage point, supplier onboarding may appear functional: suppliers get set up, invoices get paid, and exceptions are handled as they arise. Under the surface, however, the process often relies on:

• Email-based PDFs and spreadsheets
• Incomplete or inconsistent tax and banking data
• Manual follow-ups and clarifications
• Different onboarding standards across business units or regions
• Limited visibility into who approved what and why

What looks like a tactical workflow issue is actually an oversight gap. AP teams compensate through effort, but effort doesn’t necessarily guarantee control.

Instead of understanding the possibilities for fraud, supplier onboarding is still widely managed as a clerical process, not as a formalized risk control. If you don’t think that’s a major issue, consider that once flawed data enters core systems, every downstream control needs to go into reactive mode.

Why supplier onboarding represents a structural risk

You’re only as strong as your weakest link, and whatever that link may be, it has the potential to ripple across an organization.

In this case, where supplier onboarding is the weakest link, it creates structural risk that extends far beyond the supplier record itself:

• Inaccurate supplier data increases invoice exceptions and payment delays
• Manual updates slow approvals and strain shared services
• Unverified changes expose the organization to misdirected payments
• Incomplete documentation complicates audits and compliance reviews
• Weak supplier onboarding processes also undermine vendor risk management strategies

From a cost perspective, these issues translate into higher operational expense. From a risk perspective, they create exposure that is difficult to detect and even harder to rectify after the fact.

The core principle is simple and well understood in other areas of finance: Controls are most effective, and least expensive, when applied at the point of entry. For AP, supplier onboarding is that point of entry.

Where fraud exposure actually begins (it’s earlier than you think)

Accounts payable fraud is often identified late, obscuring its origin. Instead of being identified as it happens, the fraud is found during reconciliation, audit, or post-incident review.

In many cases, fraud scenarios trace back to onboarding and supplier maintenance activities, including:

• The creation of fictitious or compromised suppliers
• Fraudulent bank account changes submitted outside formal workflows
• Updates processed without independent verification or auditability

When onboarding and supplier changes are handled manually or through email, enforcement of controls becomes inconsistent and dependent on individual judgment. By the time a questionable payment is flagged, the damage may already be done. This is not a failure of AP teams; it’s a failure of process.

Get the definitive guide finance leaders use to identify risk earlier and strengthen AP controls.

The ongoing risk most organizations miss: Change is inevitable

Another executive blind spot is the assumption that supplier onboarding is a one-time control. But supplier data is dynamic, and those responsible for identifying fraud need to realize that:

• Bank accounts change
• Ownership structures evolve
• Regulatory and tax details are updated
• Supplier contacts rotate frequently

Without a formal, validated process for managing these changes, organizations unintentionally introduce risk long after the initial onboarding decision. The greatest exposure often lies not in onboarding new suppliers, but in managing supplier changes without structured verification.

What effective supplier onboarding looks like

From a leadership perspective, modern supplier onboarding should deliver three outcomes: risk reduction, operational efficiency, and governance visibility.

At a high level, that means:

• Standardized, guided supplier intake across the enterprise
• Secure collection of sensitive tax and banking information
• Clear validation and approval checkpoints before system updates
• Controlled integration into ERP and payment systems
• End-to-end visibility and defensible audit trails

It’s essential to embed controls where they naturally belong; before exposure is introduced.

Risk reduction and efficiency are not competing goals

A common executive concern is that stronger controls will slow the business down. In practice, well-designed onboarding processes reduce friction rather than create it. Automation and standardization eliminate manual follow-ups, reduce rework, and prevent downstream exceptions that consume disproportionate time and resources.

AP teams spend less time correcting errors and more time managing by exception. Finance leaders gain confidence in the integrity of supplier data. Audits become more predictable and less disruptive.

How Corcentric addresses risk at the source

Corcentric approaches supplier onboarding and vendor risk management as a foundational control, not just a process. Our supplier onboarding tools, combined with the StopFraud™ multi-factor validation framework, help ensure every supplier added to an organization’s network is legitimate and every update to banking or business information is verified before payments are released.

Corcentric handles supplier outreach and validation directly, eliminating one of the largest and most persistent drains on AP, procurement, and supplier management teams. Rather than relying on email-based exchanges or manual follow-ups, suppliers are guided through a structured onboarding experience designed to enforce consistency and control.

Suppliers can choose how they onboard:

• Secure self-service through a portal to submit tax forms, banking details, and business credentials
• Live, guided support from experts who walk suppliers through the process step by step

The onboarding portal is configurable, allowing organizations to tailor enrollment workflows to their compliance requirements, risk tolerance, and supplier management objectives. Validated supplier data flows into the ERP only after final authorization, ensuring AP teams retain full control while eliminating manual re-entry.

Throughout the process, comprehensive audit trails provide finance, AP, procurement, and supplier management teams with compliance-grade visibility, thus strengthening governance, simplifying audits, and reducing exposure before a single payment is made.

Secure payments begin long before payment

Supplier onboarding is not merely an AP function. It is a governance decision with direct implications for risk, compliance, and operational efficiency.

When onboarding is fragmented, every downstream control works harder while delivering less confidence. When onboarding is structured and validated, the entire AP lifecycle becomes more secure and more efficient.

This is an unavoidable fact: You cannot secure payments if supplier onboarding is broken.

Organizations that recognize this earliest are the ones best positioned to reduce risk, control cost, and scale with confidence.

Learn how leading finance teams are modernizing supplier onboarding to reduce fraud risk and strengthen governance.