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
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 firstname.lastname@example.org or 1300 888 803.
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