The 5 key risks in the procure-to-pay process and how to tackle them

key risks in the procure-to-pay process

Last modified on February 9th, 2024

In 2023, a facilities manager at a multinational law firm in America submitted fake invoices to suppliers totaling more than $1 million. This example highlights the need for several people to oversee the reception of invoices and the payment process during the procure-to-pay process. Read on and you will find out about some of the key risks in the procure-to-pay process. Discover some solutions to best prevent them from materializing in your company…

Trustpair helps finance teams secure the entire procure-to-pay process thanks to ongoing data monitoring throughout the payment chain. This automation results in no fraud or mistakes. Request a demo to learn more!

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Human error

Due to workers manually updating data, there is bound to be a human error somewhere along the line during the procure-to-pay process. For example, relying on employees to copy vendor or supplier details in a manual database could result in a spelling error. Therefore, your new vendors or suppliers could be uncontactable if it isn’t spotted.

This is one of the procure-to-pay risks and controls and it can be overcome by automating the process. The correct information can be extracted from forms and plugged directly into the vendor database for ongoing management.

Learn the best practices to optimize the procure-to-pay process in this article!

Poor procedures

Poor processes can be caused by a lack of controls or guidance. The chosen policies and controls in the procurement process need to be enforced effectively. If they aren’t followed in the right order can lead to a risk.

These risks and challenges in the procure-to-pay process can then leave an organization vulnerable to fraud.

For example, if you don’t complete your vendor due diligence properly, you could miss a sign that your vendor is a shell company. The vendor would receive orders, the accounts payable team makes payment and then the vendor doesn’t provide the goods and services their contract promised.

A system like Trustpair can provide reliable vendor data so you have good visibility of potential risks.

To avoid this risk, use internal controls, set clear expectations of actions and ensure regular employee training to encourage due diligence. This will mean that your employees are aware of what vendors could try and do.

80% of organizations who used security awareness training found that it reduced susceptibility to phishing.

Ensure processes such as due diligence are standardized across the company. A process assessment and strong internal controls can help manage operations and outline the changes that need to be made.

One of those changes could involve swapping manual invoice processing for automation. Most companies rely on humans reading the information from an invoice because PDF documents are not integrated with data extraction programs.

However, this process could be considered poor. Indeed, it relies on human accuracy and the manual transfer of data which can be time-consuming.

Management should enforce the new, simpler process and systems by communicating the change to all staff and educate about the risks that are involved if they don’t.

For example, during the invoice processing phase, a hacker could overtake a real email thread and ask to change details on the invoice. If the new process isn’t followed, it could lead to fraud. This step will reduce the risk during their procure pay cycle.


Non compliance

Non-compliance – which is failing to follow the internal or external rules – could be a result of a lack of internal controls or policies, such as a purchasing policy. These procurement risks highlight significant threats.

External non compliance

While measures may be hard to put into practice across enterprise companies, enforcing the policies in the procure-to-pay process is important. Without them, you can be at risk of failing external compliance which can lead to penalties.

External compliance relates to the laws, rules, and requirements set out by a governing body or the government. The rules dictate how businesses can and can’t act.

SOX law is an example of external regulations. This makes it a requirement for procedures to be implemented for the evaluation and control of data surrounding third parties.

If external compliance is not kept to, it can lead to fines and penalties.

Internal non compliance

To best navigate internal compliance, your business could explore compliance best practices. One of them is having transparent communication between different teams and a supplier or suppliers.

This could look like informing employees soon after learning new information about regulations. It could also be. holding regular team meetings to convey key information. Also, you could provide check-ins in allocated time with staff and suppliers to ensure everyone understands and applies compliance rules.

This is so that the standards have been communicated and everyone is aware of the latest rules, which limits the possibility of non-compliance internally and therefore can steer you away from external non-compliance.


Extra costs

Additionally, unexpected costs can leave a business short of working capital. For example, this could be caused by a financial penalty for a late invoice payment, caused by errors during invoice processing.

Another impact of late invoices is reputational damage. Word could spread that your company isn’t an ideal partner to work with if it regularly pays late.

Overcoming these extra costs means plugging the gaps in the systems. For the invoice example above, this means deploying automated notifications on certain dates so businesses stay on top of their outgoing payments in the procure-to-pay process.



A lack of anti-fraud defenses during the different stages of the procure-to-pay process, as well as a few fraud prevention and detection mechanisms, can result in fraud. An example is invoice fraud through inflated, duplicated, or false invoices.

In the UK in 2023, a family business was duped out of more than $1.4 million. A pair of criminals inflated invoices and delivery notes at the business which supplies mailing bags and boxes. The example highlights how important having enough controls during the procurement phase is. The fraud came to light following an internal audit between late 2018 – early 2019.

To reduce the risk of fraud, we would recommend conducting a procure-to-pay audit. It will outline any ways in which the business falls short across the whole process that could leave it vulnerable to fraud. A procure-to-pay audit can also outline ways to cost save, assess compliance around procurement, and evaluate how the supply chain is managed to improve performance.

This example of invoice fraud also highlights how important it is to apply the 4 eyes principle. The concept is based on the segregation of duties so that no employee can be in a position where they could commit and conceal fraud or errors. It is one of the key controls in the procure-to-pay process. Each activity is completed by a different person to decrease these risks.

The fraud detection mechanism to explore is working with a fraud detection software like Trustpair. Our software solution secures the entire payment chain and procure-to-pay process. This is done by auditing data to make sure that you’re paying the right person and not a fraudster.

Beware of the top 5 risks in organizations during the procure-to-pay process. These include human errors, poor processes, non-compliance, extra costs, and fraud. Take the necessary steps to tackle them. One of which is using a fraud prevention software solution like Trustpair. The platform can help finance teams by securing the entire P2P process thanks to ongoing data monitoring in the payment chain.


The major risks in the procurement process are human errors, poor processes, non-compliance, extra costs to the business, and fraud.

This is how you audit a P2P process: first, look at purchase orders and compare purchase orders to the transactions, then assess the current vendors and suppliers, explore a possible integration between procurement and accounts payable, and finally contrast the actual spend with the budget.

Our solution helps organizations wipe out fraud risks and secure their vendor database and payments. Our software monitors vendor information automatically and during the entire payment chain, up to payment campaign executions. We also provide live warnings in case of risky situations as well as customized workflows and detailed analytics.

Manage the risks related to corporate treasury.

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