Businesses need to be vigilant, review their invoicing procedures and regularly monitor the invoices they receive to avoid invoice fraud.
Invoice fraud has become prevalent, with stories of fake invoices and email fraud hitting the news almost daily. SMEs without automated invoice-management software can be at risk of suffering invoice fraud.
SMEs are at the greatest risk of invoice fraud, especially as many continue to rely on paper-based processes and spreadsheets to complete supplier invoice administration. Invoice fraud can have significant ramifications and hamper the business’s ability to operate by stifling cashflow.
We have identified five practical tips to protect your business from invoice fraud:
- Be cautious with new suppliers
If you have not worked with a supplier before, your administrative staff should be extra vigilant. Take the time to check in with the person who ordered the goods, and ensure the supplier details and invoice totals match the agreed costs.
- Be curious and suspicious
Run an internet search to check that the supplier is a legitimate business and look up their ABN on the government website. A simple step such as calling the phone number provided on the invoice can help alert you to scams.
- Be wary of a change in process
Any time a supplier notifies you of a change in banking details, company name, or address, validate the new details directly with your usual contact at the supplier. Where possible, work with the person within the business that ordered the goods or services.
- Re-examine current invoice processes
Review how the accounts payable –AP – team processes invoices. Assess if there are opportunities to move the more fallible, paper-and spreadsheet-based steps to a simpler, automated model. Supplier changes can be approved and monitored in an automated AP model. Aside from saving a considerable amount of time, centralising invoicing and payment details will reduce the available contact points where fraud can occur.
- Spend time on reporting
Run regular reports to see what types of invoices are being paid each month, and for how much. Scrutinise what is being spent and where, and look out for abnormalities. If any big-ticket items stand out, or the business has spent more in a certain category than normal, it may be worth investigating. With an automated solution, businesses can run these reports quickly and frequently. Utilising one AP platform will also let businesses spot key trends and discrepancies.
Some of the key signs of invoice fraud are: different bank details on invoices; bills for directory listings, advertising, domain name renewals, office supplies, or tax lodgings that the company did not order or place. Businesses need to be vigilant, review their invoicing procedures and regularly monitor invoices they receive to avoid invoice fraud.
Matt Goss, Managing Director – Australia and New Zealand, Concur
