Hot on the heels of the discovery that many small businesses don’t claim sub-£10 expenses comes news that they’re also losing money on fraudulent invoices.
SMEs Losing £9bn A Year
Tungsten, an e-invoicing, invoice financing and analytics company, surveyed over 1000 UK SMEs and concluded that companies of this size lose £9bn every year to invoice fraudin the UK.
The report found that nearly half (47%) of the responding companies had received a fraudulent or suspicious invoice in the last year, with 54% identifying it as their single biggest threat.
However, even though one in six SMES believed that fraud invoice had cost them in excess of £5,000 in the last year, only 44% say they would contact the police or Action Fraud if they received a fraudulent invoice, while 13% admitted to being unsure what they should do if they received one.
Tricks of the Invoice Fraud Trade
So how are fraudulent invoices issued? How do they go undetected – and what harm can they do?
Viruses embedded in invoices attached to emails: when you open the attachment, it may or may not be an invoice, but if a virus is embedded within the file it can pose a serious threat to your cyber security.
Fraudulent changes to bank details: these can occur on invoices that look genuine and may even be from a familiar supplier, but the crucial information – the bank account details – will have been changed. If this goes unnoticed, you could be unwittingly sending money straight into the bank account of an impostor, and be unaware of this until they send in a genuine invoice or demand payment.
Duplicate invoices: meaning that you pay twice or more for the same service or product..
Protecting Your Business from Invoice Fraud
“UK small businesses face all manner of challenges, and it’s telling that cyber-crime looms as one of the biggest, “ says Tungsten’s CEO, Richard Hurwitz. “What’s most troubling is that it needn’t be like this as there are steps companies can take to protect themselves.
“Technology such as electronic invoicing can help battle invoice fraud as only confirmed suppliers can upload their invoices and then these are validated before they are paid, potentially saving firms thousands of pounds.”
Whether you use technology or rely on person-power to check your invoices, make sure they are checked before opening or paying them:
Always check that bank details have remained the same and query any changes by phone on an established contact number. Do not query it via a phone number quoted on the suspicious invoice!
Ensure that invoices are checked off when paid and that no invoice is paid without first checking to ensure it’s not duplicated or fraudulent.
When you begin doing business with a new company, confirm the email addresses they’ll be using so that you can add them to a Safe Senders list or its equivalent – then you can treat any invoice that comes from an address not on the list with suspicion.
These measures will help you to keep your company’s hard-earned money in its own bank account – and not in the hands of scammers.
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