New research from Ivalua has revealed almost one-third (31%) of UK businesses have fallen victim to invoice fraud over the past year.
Alarmingly, only two in five (39%) of these businesses managed to intercept fraudulent transactions before the money was lost, highlighting the financial scale of the problem.
Ivalua claims many of the businesses might not have faced these challenges had they implemented a digital invoicing process, which echoes the findings of another recent survey by Sage.
Digital invoicing could prevent fraud
Currently, nearly two-thirds (64%) of UK businesses have not automated the matching of invoices against orders, contracts and vendor payment information. Despite the fact that many are yet to go digital, over half (52%) of respondents believe that without such automation, companies are vulnerable to fraud.
Ivalua Director of Payments Strategy Stephen Carter commented: “[Fraudsters and cybercriminals] will typically use low-value invoices that look genuine to direct payments into bogus bank accounts.”
“Many of these fake invoices are waved through by employees because they look convincing, and the amounts are often below payment thresholds or lower than the expected value.”
The study also highlights the stark reality that many fraudulent invoices come from within the business, with insider senior employees “flipping supplier bank details within payment runs to pocket the cash themselves.”
The company says that communication gaps between finance and procurement teams only serve to exacerbate the problem.
Moreover, even legitimate payments are facing delays. The average payment delay has increased from 22 to 26 days in a year, with 50% of respondents delaying payments by a month or more. Citing the findings of The Federation of Small Businesses, Ivalua reports that timely payments could prevent the closure of 50,000 businesses annually.
Carter added: “By paying suppliers on time, organizations can build the trust needed to secure materials and workers, to become the customer of choice.”
By implementing digital invoicing processes, Ivalua believes that organizations can solve these problems by both preventing fraud and speeding up payments.
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