Business Owners Beware: Invoice Scams Can Reduce Your Profits

business leader looking at papers

As a business owner or manager, you know the importance of paying your bills, but are you sure of what you’re paying for?

That’s exactly what crooks count on when they hit you with an invoice scam, where you’re billed for goods or services you never received, slashing away at your profits.

This type of fraud occurs when a scammer sends a fake invoice to your business via email or regular mail and maybe even follows up with a phone call threatening to forward the bill to a collection service as a way to make you act before you have time to think.

Invoice fraud can affect businesses of all sizes, but it can hit small businesses with tight margins especially hard. The last thing you want to do is pay for nothing.

So, how do you avoid invoice fraud?

Business owners and managers should train staff to be vigilant against fraud, and split payment and approval steps if at all possible.

When you receive an invoice, pay attention where it’s coming from and what it’s for. Do you recognize the biller? Do the goods or services on the invoice match what’s on an original purchase order and receipt? If not, check your records and personally call or contact a provider using a trusted phone number or email address for verification. No match? No pay.

A red flag should also be raised if a biller requests changes to the payment account number or requests to be paid in a new way, such as a wire transfer. Take the time to verify this type of request with records you keep at the office, not numbers or email addresses included in any mailing.

Here are additional steps to protect your business against invoice fraud:

  • Train your staff—especially those responsible for making payments—to be wary of any payment request, especially if it’s something new.
  • Check all invoices against purchase requests and receipts.
  • Compare invoices to previous ones you have received. Do bank account details, logos and other information match? Watch carefully for misspellings or slight alterations of information.
  • Set up dual controls, where at least one person checks the invoice and initiates the payments, and another person is required to approve it.
  • Conduct regular audits to verify the authenticity of vendors and payment processes.
  • Don’t pay the invoice until all information is verified.
  • Ask your financial institution about ways to protect your business.

Don’t be an invoice scam victim. Take the time to verify everything before you pay.

Are you a business leader needing banking assistance? Watch our video and get in touch if we can support you!

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