Fraud is everywhere, and it affects not only regular folks but businesses as well. One type of scam that continues to rear its ugly head is invoice scam. These fly under the radar often, and we think that should stop. The following are six things that could be done to not only spot this type of fraud but also how it could be addressed.
1. Fraud Education
It is important that businesses train their employees well enough to spot these types of frauds. Believe it or not, the reason these types of frauds are successful is that they are overlooked.Now, most of these scams change continuously, so the best thing employees can do is study each new scam that is discovered using the Federal Trade Commission. One reason this department is there is to help highlight some of the types of frauds out there.
2. Three-Way Matching Trick
Three-way matching is a rule that many organizations out there have implemented to help deal with invoice scams. Now, it is important that any organization that attempts this trick has a good record-keeping structure.What the rule dictates is that before the invoice is paid, the amount has to be verified by three different documents. The first is the invoice itself, which is sometimes all that is needed to pay the invoice but not with this procedure.
The simple invoice needs to match the purchase order and the receipt. If the numbers don't match, then there may be fraud going on.
3. Accounts Payable Automation
One of the most effective ways to prevent invoice fraud is AP automation. In essence, the AI software is installed to deal with everything related to accounts payable. The process mentioned earlier where invoices, receipts, and the purchase order will be made easier through automation.The system is going to be able to verify all of this information much faster, which not only helps reduce hours spent verifying invoices, but it also reduces error. Face it, no matter how diligent a human being is, they are going to make a mistake at some point, so having AI backing up a workforce is just smart.
4. Payment Methods Must be Confirmed
Some scammers like to trick businesses by requesting a change to the payment method. This is not rare, so the possibility does exist that a company will ask for a payment method change, but this has to be confirmed.Many scammers believe that a company will not check before switching the payment method. They are hoping it is harder to track these payments, which could help run the scam a little longer.
Employees are going to have to call the vendor to verify the payment change request and verify the account details.
5. Payments Through Custom Domains
All vendors do not take extra precautions to keep everyone they do business with safe. As a business owner, it is important to try to do business with vendors who go the extra mile to reduce the chances of invoice fraud. One of the most effective methods of doing this is for the vendor to create custom domains that are pretty unique and usually have the vendor's name within the domain.One red flag that something might be wrong or an invoice might be fake is if the payment has to be done through any other method other than the domain made specifically for vendor payments.
These are just some of the ways employees can spot fakes and what companies can do to try to reduce the chances of becoming a victim of invoice scams.
