Spotting invoice fraud patterns
Launch library · evergreen read
Invoice fraud typically involves a payment being made against a fabricated invoice, an inflated invoice, or a genuine invoice that has been altered before it reaches the person authorising payment. The scheme depends on the invoice looking ordinary enough that it passes through approval without a second look.
Common variations include invoices from a supplier that does not really exist, duplicate invoices submitted just far enough apart to avoid an obvious match, or a legitimate invoice with bank details subtly changed so payment lands in an account the real supplier never controlled. Each version exploits a slightly different weakness in the approval chain.
Effective controls tend to combine separation of duties, so the person approving an invoice is not the same person who can add a new supplier to the system, with periodic checks that call a supplier directly using contact details already on file rather than details supplied with the suspicious invoice itself.