When it comes to fine-tuning his accounts-payable system, R&E Electronics CEO Ed Mayorga can seem a little obsessive. But the results of all that attention are worthwhile. His $12-million telecommunications-service company in Wilmington, N.C., has managed to put a lid on accounts-payable fraud -- a common problem at growing companies.

To Mayorga, the secret is a system of checks and balances "involving putting as many fingers as you can in the pie." At R&E as many as five people are involved in approving and issuing payments -- an effective safeguard against the possibility that an unethical staffer might try to cut an extra check or siphon off funds through payments to a dummy supplier.

The company's purchasing manager validates all invoices relating to specific contracts, and the invoices must then be approved by the relevant project manager. Meanwhile, an office manager approves all administrative overhead expenses. Checks are printed by one of two accounting clerks, but they must be signed by the chief financial officer. Mayorga himself sees a daily list of all checks written. What's to stop the list from being short by a check or two? Well, the controller always sees R&E's bank-reconciliation statements, and Mayorga himself sees them once a month.

Mayorga's system isn't perfect. "While we don't have fraud problems, errors do occasionally crop up," he concedes. "In cases where a supplier has made a mistake and double-billed us, we might not always pick it up." One solution: "We're trying to live up to our policy of paying only from invoices."