6 Ways To Minimize The Risks Of Fake Invoice
Every year, scams relating to fake invoices cost companies millions of dollars. According to a recent study, approximately 44 percent of organizations have fallen victim to e-invoice fraud over the last three years. These types of frauds involve sending invoices for products or services that have not actually been delivered. Invoice frauds may also take place when vendors raise invoices more than once against the same purchase. Once you make payments against a fake invoice, you will hardly be able to recover the losses. Know what? It is not only the malicious third party suppliers that are behind such scams, in several instances, it has been an employee in a trusted position that take advantage of the AP department’s incompetence, and silently eat on the company profits. If you thought that you are immune to these types of frauds because you use e-invoicing software to manage your accounts payable process, then you are wrong. Fake invoices are very much a part of the digitized world. Therefore, always being on guard makes sense. Here are a few tips to avoid fake invoices:
Check the Business Information on the Invoice
We know you have invested in software to automate the entire process. But, that does not mean that you can totally skip the manual part. Keep track of the suppliers. When in doubt about any invoice, run an online background check. You can find help with the websites that are created to fight against acquisition frauds.
Match Billing Information with Given Data
It’s time to take alarm when you notice a mismatch between the information given in the invoice and the address and other data provided by the suppliers previously. One of the ways to assume that an invoice might contain dubious elements is to compare the supplier’s original address (postal and e-mail) with the one written on the invoice. A meticulous comparison may help you detect an absence of dash or an addition of an extra letter or more. Elements as simple as these can make all the difference.
Check the Company Name with the Content Data
Whether you deal only with local businesses or receive foreign invoices can make a sea of difference. The foreign, unfamiliar names can be a source of great confusion. If you receive invoices from several foreign suppliers, verify each supplier’s name against his corresponding account number.
Create a List
Make a list of the suppliers who are allowed to send you an electronic invoice. This will help you easily detect any anomaly when companies other than those included in the list send you an invoice.
Sometimes there is a gross mismatch between the price mentioned in the invoice and the products or services that have been actually procured. If you sniff any irregularity, immediately contact the person responsible for the procurement, as well as the contact person on the supplier’s end.
Match Your Invoices against Contracts or Purchase Orders
Never rush the process of checking whether the invoice corresponds with a specific purchase order. Take your time to perform the analysis. Sometimes companies find themselves under pressure to quickly release a payment — maybe there is a discount for the early payer or a penalty for being late. Don’t fall in the trap — take your time and read between the fine prints carefully.
With invoicing frauds becoming an endemic, it is no longer enough to merely digitize your AP process. Even if you have invested in the best e-invoicing software to manage your payment process, you must always be on the alert and keep track of all your suppliers. Keep our tips in mind and you will be able to reduce the risks of these types of fraudulent attacks considerably.