A fifth of UK businesses have received fake invoices
Lack of control over invoice payments leaves businesses duped by duplicates and at risk of fraud, according to a recent survey.
Concur questioned 500 businesses about their supplier invoicing processes and found that 3% of businesses have paid fraudulent invoices, whilst 21% have received fake invoices without paying. Yet only one in five of those surveyed listed fraud as a concern.
Chris Baker, UK managing director of enterprise at Concur said, “The question for me is, if only 3% know they’ve paid a fraudulent invoice, how many more companies have absolutely no idea and have paid, or indeed are still paying, fraudulent invoices? Once companies have paid the invoice, there is little hope of getting the money back, but it’s not just about the initial outlay, businesses will be falsely reclaiming VAT and are at risk of penalties, plus investigation if HMRC deems that their processes are at risk.”
“That so few people recognised fraud as a concern hints at a prevailing attitude of ‘it won’t happen to us,’ but the fact is that invoicing is still very much a manual process and people won’t get it right all the time. If a scammer gets a fraudulent invoice past your finance team once, they’ll chance their arm until you stop paying. It’s not unlike phishing in the sense that once a weak spot has been identified it will be exploited time and time again.”
Of the 500 businesses surveyed by Vanson Bourne on behalf of Concur, one in three organisations are aware that they have paid duplicate invoices – an unnecessary waste of money that could otherwise be invested in opportunities to grow. Moreover, the figure rises to 59% of businesses with between 1,000 and 2,999 employees. Potentially exacerbating this situation is that almost half of businesses questioned admitted that invoices do not always come into the same place. This issue becomes more widespread as organisations grow. Almost two thirds of firms with between 1,000 and 2,999 employees and six in ten of those employing 3,000 or more, fail to ensure that invoices always come in to the same place before being approved.
RELATED: 10 good accounting habits all SMEs should practise
Duplicate invoices were considered more worrying than fraudulent ones, with 34% citing duplicate payments among their deepest concerns, including 59% of businesses with between 1,000 and 2,999 employees. The utilities sector is particularly worried and 63% of respondents list duplicates as a major concern – small wonder given that the same percentage has paid duplicate invoices.
Baker added, “As it stands, companies don’t have the transparency needed to join the dots across the invoice function. The research demonstrates that this has very real and potentially costly ramifications. Companies of all sizes need an early warning system that flag if a vendor isn’t recognised or if invoice information is duplicated within the system. Getting a handle on this function is key to stopping fraud, getting on the front foot and avoiding an unwitting run in with the tax man.”
