Invoice fraud can be very difficult to detect, especially as many businesses rely on paper-based processes to complete supplier invoice administration. This deceptive practice involves a scammer impersonating a supplier or vendor and sending fake invoices that reroute payment of outstanding invoices to their bank account instead of the real business. As the invoice looks legitimate, the recipient may not question the payment details and proceed with paying the account controlled by the deceiver. As a result, many invoice fraud attempts — both successful and unsuccessful — often go unnoticed. 

Fake and duplicate invoices can cost organisations thousands of dollars, if not more. Unfortunately, organisations of all sizes are susceptible to receiving legitimate-looking invoices for an expense the company never incurred and paying it without hesitation. Online scammers take advantage of outdated manual processes by producing an invoice, sending it to numerous companies, and waiting for whichever one takes the bait. That business then becomes an ongoing target.

The warning signs of a fake invoice can be easy for employees to miss. Subtle tell-tale signs may include: 

• unexpected invoice emails from suppliers that are no longer part of the business network
• the supplier has provided new bank account details
• an urgent payment is requested
• the email address doesn’t exactly match the supplier’s company name
• duplicate invoices from the same supplier
• slight discolouration or blurriness to the supplier’s company logo.

When accounts payable (AP) processes are manual, it’s harder to identify fraudulent invoices before it’s too late. This is especially true for organisations that manage large numbers of invoices daily. The major areas of weakness in AP processing include poor AP controls, complex procedures, and a lack of invoice tracking. For the most part, these vulnerabilities stem from time-consuming and error-prone manual processes that remain widespread across industries.

The best way to prevent invoice fraud is by automating AP processes, as it eliminates the manual processes that scammers take advantage of. By moving away from manual processes towards automated solutions, businesses can identify and prevent invoice fraud via greater transparency and accountability.

AP automated solutions help protect businesses with the following: 

• three-way matching to track the origin of invoices and confirm their legitimacy 
• enhanced visibility and checking verification to make it easier to spot an unexpected or unconfirmed invoice
• a centralised, leaner process that limits the appropriate reviewers to just a small group
• duplicate checking to alert users to any duplicate invoices received
• creating audit trails to help identify fraud.

Invoice fraud is an immediate threat to businesses worldwide. The sophistication of fraud invoice scams has reached unprecedented levels, making it increasingly hard to detect without the right ‘check and balance’ automation solution. 

AP automation provides real-time visibility with a strong defence against invoice fraud by automatically flagging duplicate invoices and discrepancies, reducing the risk of fraudulent invoices slipping under the radar. When combined with employee awareness and education about the impact of invoice fraud, as well as proper cyber hygiene habits, organisations will have robust protection while freeing up cash flow and improving data visibility and insight.