Fraud Is Closer Than You Think

When most executives hear the word “fraud,” they imagine the dramatic headlines — multi-million-dollar thefts, bribery scandals, and fake suppliers draining company accounts. Those stories are real, but they’re just the tip of the iceberg.

The reality? Fraud in procurement is often far less visible, far more subtle, and yet equally corrosive. It may not always look like crime in the traditional sense — sometimes it’s a manager consistently steering work to a preferred supplier, or staff splitting purchase orders to avoid approvals. These activities don’t make the news, but they bleed cash, weaken controls, and erode trust.

And here’s the good news: you already hold the key to detecting it. Your procurement data — when analysed with the right approach — contains the fingerprints of fraud across all levels, from the blatant to the subtle.

What Fraud in Procurement Really Looks Like

Defining Fraud

At its core, fraud is intentional deception designed to secure an unfair or unlawful gain, causing loss to another party. In procurement, this plays out when individuals — internal or external — exploit weaknesses in your systems, processes, or oversight.

The Spectrum of Procurement Fraud

Fraud in procurement is a spectrum. It’s not only the dramatic thefts; it also includes behaviours that many organisations overlook or normalise. Here’s how it breaks down — and crucially, how procurement data can reveal it:

1. Blatant / Criminal Fraud

   • Fake suppliers or invoices, double billing, charging for services never delivered.

   • Data Signals: Duplicate invoices, payments to suppliers without active registration, sudden spend with new/unverified vendors.

2. High-Value Manipulation

   • Inflated rates, phantom variations, front-loaded payments.

   • Data Signals: Invoices consistently above contracted rates, spikes in early-stage billing, unexplained contract adjustments.

3. Process Circumvention

   • Splitting POs to avoid approval limits, forcing invoices through without POs.

   • Data Signals: Multiple POs just under thresholds, invoices without matching POs, frequent “exceptions.”

4. Preference & Bias

   • Steering work to favoured suppliers, hidden conflicts of interest, “mates’ rates.”

   • Data Signals: High concentration of spend with one supplier, repeat awards despite competition rules, absence of market testing.

5. Grey Zone / Negligence

   • Errors or weak processes that mimic fraud (duplicate payments, approving invoices without checks).

   • Data Signals: Payments beyond PO value, repeated coding errors, mismatched PO/invoice/receipt data.

6. Concealment / Masking Fraud

   • Manipulation designed to hide other fraud: single-line POs with “$1 unit price,” vague invoice descriptions.

   • Data Signals: POs with generic terms, invoices lacking detail, anomalies in description fields across categories.

7. Control Override Fraud

   • Exploiting system loopholes (e.g., allowing invoices > PO value).

   • Data Signals: Invoices surpassing PO limits, tolerance thresholds frequently triggered, overspend on approved contracts.

Why This Matters to Your Business

Fraud is not just a compliance issue — it’s a commercial issue. For CFOs and CPOs, the impacts are clear:

• Direct Financial Loss – Every inflated invoice or unnecessary PO is margin lost. Even “little” fraud like double charging adds up to millions over time.

• Operational Risk – Process circumvention erodes discipline, making it impossible to rely on procurement as a control mechanism.

• Reputational Damage – If fraud comes to light, boards, regulators, and shareholders will ask: why didn’t you see it in your own data?

• Cultural Erosion – When staff see others “getting away with it,” trust evaporates, and shortcuts become normal.

And the uncomfortable truth? Many CFOs and CPOs don’t have a clear view because fraud hides in plain sight within transactional data.

How SpendSphere.ai Helps You Take Control

This is where our tool SpendSphere.ai changes the game. Built by procurement leaders who know these patterns first-hand, SpendSphere.ai applies advanced forensic analytics to your procurement data to uncover:

• Anomalies – Detects odd PO values, duplicate payments, and rate mismatches.

• Patterns – Flags repeated PO splitting, invoice without PO trends, and tolerance abuse.

• Controls Weaknesses – Identifies where procedures (e.g., “No PO, No Pay”) are being bypassed.

• Supplier Risks – Highlights spend with suppliers lacking valid registration, sudden spikes, or suspicious concentration of awards.

But analytics is only half the story. SpendSphere.ai doesn’t just raise red flags — it guides your organisation towards:

• Tweaks to Controls – Where approval thresholds, PO policies, or system rules need strengthening.

• Process Education – Where staff need better training to avoid negligence-driven risk.

• Governance Improvements – Where procedures must be updated to close loopholes.

This means you don’t just detect fraud — you prevent it from recurring, strengthening procurement as a safeguard rather than a risk point.

Closing the Loop

Fraud in procurement isn’t just about “bad actors.” It’s about the everyday behaviours and system weaknesses that leak value from your business. By looking at the full spectrum of fraud — and applying forensic analytics to your own data — CFOs and CPOs can shift from being reactive to proactive.

With SpendSphere.ai, you gain visibility into the hidden risks, confidence in your controls, and assurance that your procurement function is protecting, not exposing, your organisation.

Fraud doesn’t need to make headlines in your business. You can find it, fix it, and prevent it — with nothing more than your data and the right intelligence.

Find Out Quickly 

If you’d like to see what your data says about fraud risk today, request a LeakFinder diagnostic (powered by SpendSphere.ai).

For as little as $25k + GST, in a matter of days, we’ll show you where anomalies lie, what risks to prioritise, and how to tighten your controls before small leaks become headline scandals.