Tungsten Network warns that invoice fraud is costing UK SMEs £9 billion each year
One business process more and more information management professionals are turning their attention to is invoicing. Digitising the process not only provides greater visibility and control, but according to Tungsten Network, it can also save small and medium-sized businesses (SMEs) billions in invoice fraud.
New analysis published by the company suggests that bogus invoices are costing UK SMEs £9 billion every year. Of 1,000 companies surveyed, almost half (47%) say they have received a fraudulent or suspicious invoice in the last 12 months. Of those affected, one in six believes it has cost them more than £5,000.
Tactics commonly used by scammers include embedding viruses in attachments; submitting fake invoices by email or through the post; making false changes to bank details; and sending duplicate invoices.
Tungsten Network CEO Richard Hurwitz advises private and public sector organisation to protect themselves from fraud by reducing their reliance on manual processing.
He said: “Technology such as electronic invoicing can help battle invoice fraud as only confimed suppliers can upload their invoices. These are then validated before they are paid, potentially saving firms thousands of pounds.”
One organisation already using e-invoicing to reduce the risk of fraud is the London Borough of Bexley. Payments manager Bel Temel said: “Our Borough has received fake invoices from anonymous professional fraudsters on more than one occasion. All our supplier contract information is on our website and in most cases the criminals have taken information from the internet to ensure the bogus invoice looks identical to the template of one of our suppliers. Generally, the only way the naked eye can spot any difference is by cross referencing the bank details with those we have listen for our supplier. This means that a fake invoice can make it through every stage of the payment process before being picked up by us in the finance team. Unfortunately, other local authorities have lost money by not spotting this and paying the balance of a fake invoice into the fraudster’s bank account.”
She added: “One way in which we’ve further protected ourselves is by introducing electronic invoicing from Tungsten Network. Now that our suppliers submit invoices through the platform, we know that every invoice received is 100% legitimate. The technology ensures the secure transacting of invoices and this has significantly helped us combat invoice fraud.”