Mid-Size Companies Lose $300 Grand to Invoice Scams
Did you know that many mid-sized businesses lose nearly $300,000 annually in invoice scams? Not only does this hurt your company, it also impacts supplier relationships.
Common Invoice Scams
As many businesses move toward digital payments, paper invoices are a thing of the past. This is where cyber-crooks take advantage. Here are some common scams to be aware of and guard against.
Illegitimate vendors: This happens when an illegitimate vendor gets into your system and invoices you for small amounts, e.g., invoices that “just get paid.” To guard against this threat, make sure there are multiple people within the company to ensure vendors are on the payable vendor list. Also using third parties to verify if they are legitimate companies helps.
Fake invoices: These invoices might look legit, but are, in fact, spoofs. The invoice might have a slight change in address, ACH routing number, or email address. Technology can catch some of this, but not all of it. Relying on one human to track and verify this information is a hazard. Rather, leveraging a third party to verify the information might prove to be your fail-safe.
Mail interception: Nearly 40 percent of companies still mail checks (do you?). Fraudsters can intercept the checks, change the name or pay-to information, and then deposit it into their account. To beat the fraudsters, reconcile your accounts each month. Missing even one month opens the door for fraudsters to enter.
“If you’re not monitoring your accounts,” commented Nick Finkenauer, a MHCS shareholder and CPA, “you cannot mitigate the risk. Internal controls need to be a part of your accounting workflow to help reduce invoice scams like these.”
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