Has your business fallen victim to invoice fraud?

• Business News
• Managing a Business

Did you know? Almost one in five small businesses in Australia have fallen victim to invoice fraud.

According to a recent survey conducted by Xero, approximately 18% of small businesses have been defrauded by scammers for an average sum of $15,500.

Over 1000 small businesses took part in the survey from all over Australia and across various industry sectors.

“The survey found that more than one in five (22%) respondents know of another small business that has encountered cyber criminals sharing fraudulent invoices, with one in 10 (11%) saying their peers were targeted within the past year.”

XERO business

What is invoice fraud?

Invoice fraud (also known as “false billing”) is a scam invoice system run by cyber criminals where demands of fraudulent payments are requested from targeted businesses.

Phishing scams, fake invoices, fraudulent offers, and account hacking are all common attacks of invoice fraud, where criminals impersonate a person or business that their target already has a relationship with.

“Businesses may fall victim to a phishing scam where they receive a bill from an email address which looks to be from a supplier but has been intercepted and payment details have been changed. False billing scams request businesses to pay fake invoices for services or goods that they did not order.”

xero business

Of those businesses surveyed, larger small businesses were hit hardest, losing on average $25,370 where micro businesses and sole traders lost an average of $16,160 to invoice scams.

How can your small business avoid invoice fraud?

As small businesses move towards digital solutions for their accounting needs, it is also important to consider measures of protection from fake online scams.

While online account security is a must, the survey results revealed 28% of small businesses don’t spend any money on protection and education for their business.

Further to this, only 42% of businesses surveyed said they could confidently spot a fraudulent invoice.

“When asked if they could identify a fraudulent invoice, only two in five small business respondents were confident in spotting one. Three in 10 respondents didn’t know how to spot a fraudulent invoice or were unsure if they would know how. Small businesses in the start-up phase are at the greatest risk, with under one-third of respondents able to identify a fraudulent invoice.”

xero business

Automated management solutions are important in any small business to detect scams as fast and quickly as possible.

To detect fake invoices, offers and phishing attempts, automated accounts payable solutions mean changes or inconsistencies are brought to the attention of small business owners and their accounting team.

E-Invoicing also helps to reduce the risk of being scammed as electronic exchange invoices directly between accounting software systems via a secure and trusted network – meaning the days of relying on an email will be over.

“The E-Invoicing process offers peace of mind that invoices businesses receive are from a trusted supplier.”

XERO BUSINESS

 To find out more on invoice fraud and switching your accounting over to a trust online system, book your obligation free appointment with the team at Elevate Accounting HERE.