These days, you can never be too careful when it comes to protecting business documents, and that’s especially the case when it comes to invoices. Not knowing how to identify fake invoices could be detrimental for your business in numerous ways. The consequences could range from having funds or identities stolen, to damaged relationships with your vendors.
Once you understand how to quickly and efficiently identify fake invoices, you can stop invoice fraud in its tracks and protect your business from bad actors.
What Is Invoice Fraud?
Before you can stop invoice fraud, it’s important to first understand what a fraudulent invoice looks like. Invoice fraud occurs when a bad actor sends an invoice to a business for the purpose of defrauding them. There are various ways untrustworthy people can carry out invoice fraud. They include:
- Impersonating a vendor’s accounts receivable team by using an email address associated with the vendor and requesting that a company’s AP department use new banking or payment information. This would provide funds directly into the fraudster’s bank account.
- Sending settled invoices that have been altered or changed to reflect an increase in the amount due.
- Sending the same invoice out multiple times with the goal of receiving duplicate payments for the same service.
- False invoicing, which entails sending out an invoice for goods or services that were never performed or received.
- By sending a seemingly accurate invoice with language that contains falsehoods about actions that could be taken if funds aren’t received within a certain time frame.
3 Ways to Identify Fake Invoices
Avoiding invoice fraud is simple when you know what signs to watch for. Some of the most common signs of invoice fraud include:
1) Intimidating Language
Reading in-between the lines of recent invoices that you’re received may reveal language pressuring you to pay for certain products (that you may or may not have even ordered) by a certain date with the threat of legal action.
Usually, invoices that contain this type of language are fraudulent, and scammers are relying on you to panic, believe the threats and pay them quickly. Reading through the fine print of your invoices and spotting language like this prior to paying can be exactly what it takes to prevent you from falling victim to invoice scams. This is especially true if you notice this type of verbiage randomly appearing on invoices from vendors you deal with on a regular basis.
2) Discrepancies Between Purchase Order Numbers and Invoice Numbers
If the language on the invoice checks out, then it’s time to check the other details on the invoice. One of the most important is the order number associated with the invoice. If the order number on the invoice doesn’t match up with the one shown on the invoice, then there’s a high probability that you’re about to be scammed by an invoice fraudster.
Other areas you should check for discrepancies between your receipt and the invoice include the amount due and the product or service that was ordered. Even though checking for discrepancies is one of the most important techniques for identifying fake invoices, they can sometimes be hard to catch. That’s why organizations hoping to avoid invoice fraud rely on AP software. This invaluable tool comes with three-way matching capabilities that allow users to cross-reference details on receipts, purchase orders and invoices.
3) Inconsistent Customer Contact Information
Another warning sign that you could be dealing with a potential case of invoice fraud is if you notice that the contact information on the invoice catches you off guard. If the contact information is different from what you’re familiar with, you should reach out to the vendor contact you have on file. They will be instrumental in helping you get to the bottom of the situation.
Let AP Software Help You Identify Fake Invoices
AP software, like PaperTrl, can help you identify fake invoices quickly. From the secured vendor portal that captures invoice details directly from the vendor themselves, to duplicate bill flaggings, AP software makes invoice fraud one less thing your AP department needs to worry about.
For more details on how PaperTrl can help protect your business from invoice fraud, contact us for a free demo.