Year-End Financial Fraud: How to Spot It and Stop It Before It Costs You

The end of the year is one of the busiest — and riskiest — times for businesses.

Between closing the books, managing last-minute expenses, and juggling holiday operations, it’s easy for small financial discrepancies to slip through the cracks. Unfortunately, that’s exactly when fraud tends to strike.

Fraudsters thrive on distraction and disorganization — and Q4 gives them both. Whether it’s an overlooked payment, a fake invoice, or internal misuse of funds, financial fraud can hit hard if you’re not paying attention.

Here’s how to spot the warning signs early and keep your business protected through year-end.

1. Watch for Unusual Transactions

One of the simplest ways to detect fraud is to pay attention to what doesn’t fit.

Look for:

• Duplicate payments to the same vendor
• Unexplained adjustments or journal entries
• Large or round-number transactions with no clear documentation
• Sudden changes in vendor information

Even if something seems minor, flag it. Year-end is when a lot of “miscellaneous” expenses try to sneak by unnoticed.

2. Review Vendor and Payroll Records

Fraud often hides where there’s routine — and nothing feels more routine than vendor and payroll payments.

Take time to verify your vendor list. Remove inactive accounts and confirm payment details match legitimate sources. Check that every vendor is still active and every invoice is valid.

For payroll, look for duplicate employee names, unusual bonuses, or last-minute pay increases. These small checks can prevent big losses.

3. Tighten Access and Approval Controls

Year-end often means more spending, more approvals, and more people handling transactions. That’s why it’s crucial to review your internal controls.

Limit access to sensitive accounts and financial systems to only those who truly need it. Require dual approval for large payments, and make sure no one person can both initiate and approve the same transaction.

It’s not about distrust — it’s about protecting your team and your business with proper guardrails.

4. Reconcile Accounts Frequently

When things move fast, fraud moves faster.

Instead of waiting until the end of the month (or year), reconcile your accounts weekly during Q4. It’s much easier to catch irregularities when they’re fresh — and much harder for fraudulent activity to go unnoticed when your books are consistently reviewed.

If you use accounting software, enable alerts for unusual activity or large transactions. A little automation can go a long way in prevention.

5. Build a Culture of Transparency

The best fraud prevention isn’t just systems — it’s people.

Encourage employees to report suspicious activity, questionable invoices, or odd requests. Make sure your team knows how to escalate concerns safely and confidentially.

Fraud is far less likely in businesses where everyone feels accountable and informed.

6. Work With an Expert Partner

Even with the best intentions, fraud can slip through if your systems aren’t built to detect it. That’s where working with a trusted accounting partner like Decimal makes a difference.

We help businesses implement stronger internal controls, automate reviews, and maintain clean, verified records year-round — so red flags don’t stand a chance.

Because the best way to fight fraud isn’t reacting to it — it’s preventing it before it starts.