How to Shield Your Business from Fake Invoice?

Got an invoice asking to complete payment on an urgent basis while you have no idea where it came from? Then, be alert! You might be the target of someone who wants to withdraw your hard-earned money. Such activities are carried by evil-minded individuals that could lead to million-dollar loss for your business.

Generally, these fraudsters send fake invoices to small businesses as they think money would be transferred easily with less effort. If you find yourself in a similar situation, keep aside such fraud invoices and read these handy tips to avoid falling victim to fraudsters. Let’s dive deeper into how to deal with fake invoices and safeguard your business.?

What is a Fake Invoice?

Fake invoices are illegal documents used to demand money with malicious intentions. Sometimes referred to as ghost invoices, they are typically shared by scammers, urging payment for services that will never be provided. Currently, there is an increase in fraudulent activity, with scammers sending duplicate invoices to business owners like you.

This is where many business owners may fall prey to such individuals, often before realizing that the documents provided are just copies of fake invoices. However, there is nothing to worry about with these people but to ensure you have robust financial security.

Such fraudulent invoices are so difficult to identify as they are carbon copies of the original document. Fraudsters would have the name of a legitimate company in invoice to deceive you and you may unwittingly pay a fraudulent bill as if it were a regular invoice. Ultimately, you would suffer from financial loss.

How to Spot a Fake Invoice?

Presence of any unusual things in the invoice indicates a warning sign for your business. Here is what you need to take care of while going through an invoice.

1. Unusual Payment Request

You might have received a fake invoice if the issuer offers vouchers or asks to complete payment using crypto currencies. Enterprise-level businesses will neither ask you to follow such a process nor insist you to make payment faster.

So, whenever you spot any unusual payment request, consider that fraudsters have picked your business as their next target.

2. Spelling Errors

Scammers are likely to make spelling mistakes in a hurry to extract your money. These small things should not be overlooked and checked properly before making a payment. Look whether your company or business owner's name is correctly written. Also, double-check on purchase items and descriptions to find out if there is something fishy.?

3. Determine the Source

Soon after someone issues an invoice, ask yourself from whom you got this document. Nowadays, since anybody can use the free invoice template to create a professional-looking invoice, it is crucial to know the actual source. This process may help you uncover the real identity of the issuer so that you can decide whether it is safe to make the payment.?

4. Review Contact Details

Businesses can filter out fraud invoices by reviewing contact information. If a scammer has mentioned some random phone numbers or incomplete email addresses, then it is likely to be a phony invoice. The reason is because they do not want you to call the real company. Hence, clearing payments without making a phone call may lead to a significant financial loss.

4 Ways to Prevent Your Business From Fake Invoices?

Here are four ways that will help you distance yourself from the world of fake and dishonest individuals. By following these four ways, you may avoid becoming a victim of such scams and protect your business from fraudsters.

1. Always Use Invoicing Software

Adopt reliable invoicing software like Moon Invoice and automate the estimating and invoicing tasks. It empowers business owners to review and authorize invoices even from remote locations. Using this software, you can take a closer look at invoices to verify the invoice right at your fingertips. It is a sophisticated software consisting of the highest-level data security, which means no fear of being a victim of fraudsters.

It ensures you keep the original copy of invoices safe in the cloud-hosted environment. With Moon Invoice, not only vendors but also you can create formal documents by utilizing free tools such as invoice generator, estimate generator, or receipt maker. Hence, it is an efficient way to fortify your business.??

2. Instant Verification?

As an owner, you must stick to the instant approval process for payment verification. You should only authorize the invoice with your signature after carefully reviewing it. Refrain yourself from making payments in haste. Coordinate with your team to know when you made the purchase. If nothing matches with your purchase records, immediately freeze the payments.?

Additionally, stay in touch with vendors and suppliers to confirm purchase orders. By doing so, you know when to expect invoices rather than receiving surprise invoices. Setting up such a strict process plays a significant role whenever you have an invoice with a strange and higher amount.?

3. Encourage Transparency

Since you are in charge of your business, you must establish transparency in communication with your employees. If not, they may skip raising an alarm at the time of a fraudulent event, which can cause serious financial problems.

That’s why it's important to encourage your staff to have open communication and discuss any suspicious activity going on. Transparency in communication with employees can make a difference in safeguarding your business from bad people.

4. Regular Audits?

Instruct your accounting team to perform regular audits no matter what type of document is received in the name of your business. Scammers do not have any fixed time for sending fake invoices and therefore, your team should be on their toes to spot phantom invoices. If required, you must educate your team to use advanced detection techniques to turn down potential financial threats. Also, you can hand over additional responsibility to experienced individuals to scan invoices without fail.

Wrapping Up

To sum it up, businesses should focus on improving internal controls and creating awareness within organizations. Such things will make it easier to lift the red flags whenever something unusual happens. Fake invoice is not something new but it has seen a significant surge in recent years. Fraudsters have considered it as a modern-day weapon to extract money from business bank accounts.?

Currently, such invoices are highly circulating in the market, displaying a warning sign for businesses to keep a tab on the payment process. These paper-based fake invoices have been a serious concern especially for small businesses. Automating your invoicing process is an ideal solution to deal with such fraud cases. Switch to an online invoicing process with Moon Invoice and say no to hand-made invoices. Get your 7-day free trial now.