Your Accounts Payable Team's Biggest Risk Isn't Fraud — It's Complacency

Fraud gets the headlines. Complacency causes most of the losses.

When an invoice fraud occurs — a spoofed supplier, a redirected bank account — it tends to generate a post-mortem, policy changes, maybe a board discussion. But the steady, invisible drain of continued payments to stale, cancelled, or restructured suppliers rarely triggers the same response. It happens too slowly to feel like a crisis.

The scale of the problem

In postcode 2000 — the Sydney CBD — 7,559 ABNs were cancelled in the past 12 months alone. That is not unusual. Across Australia, tens of thousands of businesses cancel their ABN registrations every month. Some are deliberate cessation. Some are restructuring. Some are the early warning sign before a formal insolvency.

The accounts payable team at a mid-size organisation typically manages somewhere between 200 and 2,000 active suppliers. Using cohort data from the Australian Business Register, we know that around 15–25% of any supplier portfolio registered more than two years ago may have changed ABN status, ownership, or legal structure since initial onboarding.

Most of those changes are never detected.

How complacency compounds into risk

The pathway is predictable:

• Supplier is onboarded in 2022 with an ABN check. ABN is valid. Payment begins.
• In late 2023, the supplier restructures. The original entity enters voluntary administration. A related entity continues trading under a similar name.
• Invoices continue to arrive. The supplier contact is the same person. The bank account details change — a new BSB is provided. AP processes the update without triggering re-verification.
• By the time the original entity is formally deregistered, twelve months of payments have gone to an entity whose status should have triggered a hold.

This is not a fraud story. This is a complacency story. The AP team followed their process. The process just had no mechanism for detecting change.

What re-verification actually requires

Running a Gumshoe check on an existing supplier takes the same time as running it on a new one — under 30 seconds. The ABN status check, GST verification, insolvency register cross-reference, and business name lookup all return live data from government sources.

The question is not whether re-verification is operationally feasible. It clearly is. The question is whether organisations build it into their supplier management cycle — at least annually for the full list, continuously for high-value suppliers.

Phoenix Shield runs continuous monitoring across your supplier portfolio and alerts when ABN status, ASIC insolvency status, or other key signals change. It turns re-verification from a periodic manual process into an automatic background function.

The complacency audit

A useful exercise: take your accounts payable list and check the ABN status of every supplier you have paid in the last 90 days. Identify how many have a last-verification date older than 12 months. In our experience working with procurement teams, that number is almost always higher than expected.

Complacency is not a character flaw. It is a systems gap. The fix is also a systems fix — not individual vigilance, but automated monitoring that removes the dependency on manual re-verification cycles.

Uncommon Insights

One of the lesser-known risks associated with complacency in accounts payable teams is the potential for non-compliance with the Corporations Act 2001, specifically Section 588G, which deals with insolvent trading. If a supplier is trading while insolvent and the accounts payable team continues to make payments, the organisation may be inadvertently supporting insolvent trading, potentially leading to ASIC enforcement action. This risk is particularly relevant given the high number of ABN cancellations in Australia, which can be an early warning sign of insolvency.

The ATO's own data highlights the importance of regular re-verification of suppliers. According to the ATO, there were over 240,000 ABN cancellations in the 2020-21 financial year alone. This number is likely to include a significant proportion of businesses that have restructured or changed ownership, potentially triggering a need for re-verification. Failure to re-verify suppliers regularly may lead to non-compliance with the ATO's requirements for GST and income tax withholding, potentially resulting in penalties and fines.

Despite the clear risks associated with complacency in accounts payable teams, ASIC's enforcement patterns suggest that this issue is often overlooked. A review of ASIC's enforcement actions in 2020-21 reveals that the majority of actions related to corporate governance and financial reporting, with few actions specifically targeting accounts payable practices. This suggests that organisations may be inadvertently creating a culture of complacency in their accounts payable teams, potentially leading to significant financial and reputational risks.

The use of automated verification tools, such as those provided by the Australian Business Register, can help organisations mitigate the risks associated with complacency in accounts payable teams. However, it is essential to ensure that these tools are integrated into the supplier management cycle, with regular re-verification of suppliers conducted at least annually. This approach can help organisations stay on top of changes to supplier ABN status, ownership, and legal structure, reducing the risk of non-compliance and financial loss.