What is invoice fraud?

There are daily occurrences of spam related issues impacting people and businesses. It could be via e-mail or a telephone call and usually involve a person trying to impersonate somebody else. Their ultimate goal is to access confidential information and extract as much money as possible.

If we put this into a business context, there is currently a very popular scam running focussed on invoices. Invoice scams are common and can have a serious impact on a business’s cashflow. Often the impact of this type of fraud will mean more than £10,000 being exploited from a business from just one single invoice.

Invoice fraud occurs when a business is tricked into changing the bank details displayed on an invoice. Criminals will target businesses by impersonating suppliers. They will look to contact accounts departments and request that records on account need to be updated so that future payments are swiftly paid.

When the criminals are successful, they get paid substantial amounts which in turn means that suppliers remain unpaid and businesses have to swiftly provide a resolution. Often having to pay the cost of the invoices twice will have a serious impact on the businesses cashflow.

There are several steps that a business can take to protect themselves from invoice fraud:

1. Carefully scan all e-mail communications, if a request for changing payment terms is made, make sure you speak to the company requesting the changes to ensure that it is legitimate. 
2. If there are any requests for urgent payments, check their validity. It will be very unusual for a supplier to suddenly change their payment terms so a red flag should immediately be recognised.
3. Make sure that all staff working in accounts are aware of these scams and are given the correct training in all aspects of fraud.
4. Always be careful with e-mail attachments. Deploy security software that can quickly identify spam messages.
5. Don’t give too much information away, for example only display the most important business information on a website and make sure any data collection is accurate and secure.
6. When paying new suppliers, complete due diligence and only make payment when everything is 100% legitimate.

If you have any questions in regard to invoice fraud or need some help with any aspect of business accountancy our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min