In today’s business world, invoice fraud is a big threat to companies of all sizes. While such scams may seem complex, identifying and avoiding them is quite simple.
In this article, we’ll explain how to spot fake invoices and give you some tips to prevent invoice fraud. By the end, you’ll have the knowledge and tools to protect your organization from these types of scams.
What is invoice fraud?
Invoice fraud is a type of fraud where scammers send fake invoices to a business. They might, for example, pose as a supplier and pretend that the suppliers’ payment details have changed, so that the money is sent to their account instead.
Sometimes scammers intercept real invoices and change just the bank account information, leaving everything else the same. That’s why it can be hard to spot a fake invoice. Here, we will highlight key signs of invoice fraud and share effective strategies to prevent it.
When can you experience invoice fraud?
Invoice fraud often begins with scammers learning about the relationship between a vendor and a business. They familiarize themselves with details like when the vendor usually sends invoices and when the business usually pays them. Armed with this knowledge, they use clever tactics to hack into the company’s email system or database, where they uncover sensitive payment information and other confidential data.
3 signs of invoice fraud
If your company is dealing with a lot of invoices on a daily basis, it can be difficult to spot fake invoices. It’s important that you get a good overview of incoming invoices, and keep an eye out for warning signs.
Here are some indicators that an invoice might be fake:
1. Unusual numbers:
If there are many unusual numbers on an invoice, it can be a sign of invoice fraud. Carefully check the numbers to see whether the invoice is questionable. If in doubt you can always contact the vendor to verify the invoice.
2. Look at the address of the vendor:
You’ve probably purchased from the same vendor several times. Check the contact information or payment details on your new invoices and compare it to previous invoices.
3. Fake orders:
Sometimes scammers make up completely fake invoices. They might pretend to be service providers, providing web hosting, for example, and ask for annual fees. They could also claim that you owe money for products you never ordered.
To combat invoice fraud, you should have good routines to identify and flag potentially fake invoices.
You should also take steps to avoid your invoices being flagged. If you send invoices with missing or wrong information, your customers could have to follow up with you to verify the invoice. With invoice software you can make accurate and professional invoices that include all the necessary information, so that your customers pay on time.
Also Read: Ultimate Guide to WebP Images in Magento 2: Benefits & Usage
How can You Prevent Invoice Fraud?
- Check the spelling and layout: Look for misspelled words and unusual formatting. These are both indicators of invoice fraud.
- Be careful about your information: Be careful about what supply chain information you share on your website or on social media. Removing details like supplier testimonials can help protect your business against fraud.
- Train employees: Make sure that all employees are informed about what invoice fraud is and how to detect it. There should be a clearly outlined routine for how to verify the invoice before approving the payment.
- Establish a single point of contact: Set up a contact person for regular suppliers to simplify communication and reduce the risk of fraud.
- Check invoice details: Compare incoming invoices with previous invoices. Do the same for internal requests.
Implementing these measures can help you avoid invoice fraud.
In need of free invoice software?
Maybe you’ve just started a business or you’re looking for a free invoicing alternative. With Conta, you can send an unlimited amount of invoices, and add as many users, customers and products as you need. It’s easy to get started, there’s nothing to install or download. All you need is a browser and an internet connection. Good luck with your invoicing!
