Invoice scams and its risks to SMEs

A new survey has revealed that nearly one in five small and medium-sized enterprises (SMEs) have fallen victim to fake invoices.

The survey — conducted by Xero and based on data from 1,000 SMEs — found 18% of businesses have mistakenly paid bogus invoices, losing an average of $15,467.

Asked whether they could identify a fraudulent invoice, only two in five respondents were confident they’d be able to spot one.

This finding reinforces the need for e-invoicing to be widely adopted in Australia, says Xero Australia and Asia Managing Director, Joseph Lyons.

What is e-invoicing

Electronic invoicing or e-invoicing is the automatic exchange of invoices between accounting software. Electronic invoicing does not involve emailing invoices, nor is it a PDF invoice.

Rather it’s the ability to electronically submit invoice data from one party’s accounting system to another’s, regardless of the software used to generate the invoice.

“Emerging tools like e-invoicing have the potential to create a safer and more effective way to manage invoices and bills,” says Mr. Lyons.

How to combat invoice scams

If your business hasn’t started e-invoicing yet, there are still things you can do to guard against invoice scams.

The Australian Cyber Security Centre (ACSC), a government agency, recommends you slow down and take time to verify the supplier’s identity.

Among the ACSC’s tips are:

• be wary of emails that were unexpected, for example an invoice from a supplier you haven’t dealt with in a while, or a payment amount that differs from previous amounts,
• teach your staff to look out for other red flags of invoice-scam emails like:
• the supplier has provided new bank details,
• urgent payment is requested, or
• you’re threatened with serious consequences if payment isn’t made,
• the sender is someone in a position of authority, particularly someone who wouldn’t normally send payment requests, or
• the email address doesn’t look quite right. For example, the domain name doesn’t exactly match the supplier’s company name.
• Double-check the details by looking at previous correspondence.

Protect yourself. Get expert advice

If you have received an email or invoice that appears to be suspicious, contact IP Australia or report it online via ACSC website.

Looking to make the switch to a more secure way to invoice like e-invoicing? We can give you a second opinion on your accounting software and advise you what to do to ensure it delivers all the services and functionality your business requires.

Contact us for a complimentary consultation at info@modoras.com  or 1300 888 803.

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