Audits don’t usually go sideways because of fraud. They go sideways because the trail is broken.
If your internal controls live in a policy doc and rely on everyone “doing the right thing,” auditors are going to have questions. The good news? You don’t need a compliance team to put the right guardrails in place. You just need to bake those rules into the systems your team already uses.
Here are five controls auditors consistently look for, and how modern finance teams build them into their day-to-day AP process.
Segregation of duties that actually holds up
The invoice shouldn’t be uploaded, approved, and paid by the same person. That’s not a judgment call. It’s audit 101.
Auditors expect to see a clean separation between roles. The system should physically prevent one person from handling the entire lifecycle of a transaction. The best platforms track every handoff and make it visible by default.
If your current setup can’t show that flow in one click, it might be time to look at tools that can. Finofo makes this part simple, and you can book a demo to see it in action.
Approvals based on logic, not memory
Every organization has approval thresholds. The problem is, they often live in people’s heads or static docs.
Auditors want clear, applied thresholds. Less than $1,000 goes to a manager. Between $1,000 and $10,000 gets routed to a department lead. Anything above that needs the CFO. And the system should apply that logic automatically, without someone having to remember who’s on vacation.
Vendor management is your control center
Auditors love to ask who added a vendor, who edited the bank info, and whether there was a second set of eyes on it.
Your system should:
- Require dual approval for new vendors
- Restrict access to vendor master data
- Flag duplicate entries in real time
According to Thomson Reuters, vendor-related fraud remains one of the top audit concerns for growing companies. That risk drops fast when your controls are embedded, not bolted on.
Audit trails that don’t require digging
The problem with manual approval chains is that no one knows who did what when the auditor shows up.
Your finance system should track:
- Who received the invoice
- Who coded it
- Who approved it
- When payment was released
When every action is logged and timestamped, the audit becomes a formality. Not a scavenger hunt.
Policy enforcement without guesswork
The most effective compliance approach isn’t having more rules. It’s having fewer exceptions.
System-enforced policies like “no invoice approved without a PO” or “all invoices over $10,000 require dual signoff” ensure that compliance isn’t something you check after the fact. It’s part of how your team works.
If that kind of enforcement sounds like something you need, book a demo with Finofo. We’ll show you how lean teams build these controls into their AP flows.
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