10 Ways to Prevent Invoice Fraud

Recent invoice fraud statistics:

• UK businesses lose around £9 billion annually because of invoice fraud 
• 43% of businesses are unaware of the existence of invoice fraud
• There were 3,280 invoice and bank mandate scam cases involving businesses over the year, with an average loss per case of more than £28,000.

Financial Fraud Action UK has warned companies to "check twice, or pay the price!"

How to protect your company from invoice fraud

1. Establish at least two designated points of contact with all your regular suppliers - and contact them in the event of all invoice queries.
2. Always check any change of bank account or payment arrangements directly with the supplier - but only use the contact information you have on file to do this. Don't call named people on an unsolicited letter or email.
3. Don't be pressured - into processing payment without carrying out checks. Fraudsters may try to inject urgency - for example, by threatening late delivery or some other negative impact on your business. Don't be fooled by this. A genuine supplier will understand the need for vigilance.
4. Carefully scrutinise all invoices you receive - there may be subtle but noticeable differences - such as misspellings, a blurred logo or one with slightly different colours; the inclusion of bank details where none had been stated previously; a different email address with small changes (.com or .org instead of .co.uk); a new signatory; changes in the amount invoiced; changes in the method used to request payment; a different contact name or phone number for correspondence, etc. Train yourself and others to spot the signs.
5. For substantial payments, insist on meeting or talking to a designated point of contact first - so you're sure that the right account is credited.
6. Always send confirmation - let suppliers know when you've made payment and what account you've credited by sending a confirmation email to designated contacts.
7. Think security before publishing details of your suppliers online - while transparency is a good thing, by advertising who supplies goods and services, you're making it easy for fraudsters. Is it really necessary to publish their names so openly?
8. Maintain confidentiality - don't leave invoices on your desk or screen unattended and never in public view.
9. Consider whether other measures might help prevent supplier invoice fraud - e.g. QR codes or barcodes, etc.
10. Reconcile accounts regularly - so potential fraud is detected more quickly.

Want to learn more about Fraud?

We’ve created a comprehensive AML & CTF roadmap to help you navigate the compliance landscape, supported by several financial crime prevention courses in our Essentials Library.

We also have 100+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, posters, training presentations and even e-learning modules!

Finally, the SkillcastConnect community provides a unique opportunity to network with other compliance professionals in a vendor-free environment, priority access to our free online learning portal and other exclusive benefits.