Don’t let them empty your bank account!!! The secret to protecting your business from invoice fraud

Most of us can spot an obvious scam email. More sophisticated Accounts Payable fraud emails are much harder to spot.  Today, we are going to discuss invoice fraud prevention and just how simple it can be to possibly save your business thousands of dollars in fraudulent transactions.

Particularly for businesses with higher volumes of invoices passing through the AP department. Small to Medium businesses are seeing increasing numbers of fraudulent invoices emailed as it’s an easy target for more scammers. 

Recent surveys found that more than 80% of organisations have been targets of fake invoices and payments fraud in the last year. Although they are not immune, larger companies tend to have more significant resources and technology to counter it. The fact remains it’s the SMBs that are at most risk.

This subversive industry is very lucrative, as revealed by an ACCC report, which found Australian businesses reported a total of $132m lost to email fraud in 2019. Keep in mind that is the amount that was identified. 

We will never know how much has gone undetected. With so much money involved, you can see why scammers become continually more “professional” in their approach, making it very difficult for average people to pick up on the fraudulent activity.

Most invoice scams tend to work like this. A major supplier has their email system compromised, which gives access to their send list and a copy of their invoice template. The scammer then replicates the invoice and alters the payment details to an account they control. Often a notice will be included to change bank details, so the victim doesn’t automatically pay their regular account. Even to the point of changing contact details so if a call is made, somebody on the other end (part of the scam) will happily verify the change is correct. Everything looks legitimate; the receiver often doesn’t question the details and just acts on instruction. Once money has been sent to the scammer’s account, it’s gone for good.

Sophisticated scams, therefore, require more sophistication from the business to counter them. The best way to reduce the risk of invoice fraud is with a quality Accounts Payable Automation solution. These work as an extension of your financial software to streamline the Accounts Payable process and help prevent fraud. Most AP Automation systems have several systematic checks and balances based on predetermined rules. Examples include:

• Validation of suppliers with accounting system for payment
• Invoice approval workflows with various authority levels
• Matching invoices match against purchase orders
• Apply segregation of duties with alerts and/or workflows for changing vendor details such as bank accounts
• Eliminate manual data entry of invoices for posting and payment
• Provide audit trails of invoice approvals and payment

Those are a few high-level examples of how AP Automation can help protect your business from invoice fraud. 

That is only part of the benefits offered by these solutions. You can also see a significant reduction in administrative overhead and error rates in AP processing. There are many options available for AP Automation. While they can be fundamentally similar, we recognise that the right one needs to be matched to your particular business requirements to get the best return on investment. We’re here to help at Thrive and guide you through the process to identify the best fit for your business. If you feel your business could benefit from a more in depth discussion around invoice fraud prevention –get in touch with our team of experts today on 1300 868 474.

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