Between 2013 and 2015, a single scammer tricked Facebook and Google into paying over $100 million in fake invoices. If the biggest tech companies in the world can be fooled, so can you.
Invoice fraud is not about hacking your firewall; it's about hacking your people. It relies on urgency, authority, and the mundane nature of paying bills. This guide will teach you how to spot the red flags and lock down your accounts payable process.
Invoice fraud occurs when a business pays a fraudulent invoice sent by a scammer who is pretending to be a legitimate supplier. The money is sent to the scammer's bank account, and once the transfer clears, the funds are often moved offshore instantly.
It is a low-tech, high-reward crime. All a scammer needs is a PDF editor and an email address.
You receive an email from a regular supplier: "Hey, our bank account is under audit, please make this month's payment to our new account." The email looks real. The logo is real. But the bank account belongs to a thief.
An email comes from your "CEO" to the finance manager: "I need this invoice paid urgently for a confidential acquisition. Do it now." The urgency makes the employee bypass standard checks.
A scammer sends an invoice for a small amount (e.g., $49 for "Domain Hosting" or "Directory Listing"). It's small enough that no one questions it, and it gets paid automatically.
Train your team to look for these warning signs:
[CONTENT IMAGE 2: Warning sign illustration showing a fake email address vs a real one (typo spotting)]
AI Prompt: Warning sign illustration showing a fake email address vs a real one (typo spotting)
support@microsoft.com or support@micosoft.com?The Golden Rule: If a supplier asks to change their bank details via email, NEVER update it without verifying.
Call the supplier using a phone number you already have on file (not the one in the suspicious email). Ask to speak to your contact and confirm the change verbally. 99% of the time, they will tell you they never sent that email.
The best defense is a boring accounting process called the 3-Way Match.
[CONTENT IMAGE 1: Infographic of the '3-Way Match' process (Purchase Order + Delivery Note + Invoice = Payment)]
AI Prompt: Infographic of the '3-Way Match' process (Purchase Order + Delivery Note + Invoice = Payment)
Before paying an invoice, the accounts payable team must match three documents:
If you don't have all three, the check doesn't get signed.
Humans make mistakes; software doesn't. AP Automation tools can help:
Speed is critical.
Your Accounts Payable clerk is the goalkeeper. They need to feel empowered to say "No" to the CEO (or the fake CEO) if the process isn't followed.
Run phishing simulations. Send fake "urgent" emails to your staff and see who clicks. Use it as a teaching moment, not a punishment.
Can you get the money back? Often, no. Banks are generally not liable if you authorized the payment, even if you were tricked.
However, "Cyber Insurance" or "Crime Insurance" policies may cover social engineering fraud. Check your policy today—standard liability insurance usually excludes this.
Whaling is a specific type of phishing attack that targets high-profile executives ("big fish") like the CEO or CFO to steal sensitive data or authorize payments.
Not necessarily. Anyone can print a fake invoice and mail it. However, digital fraud is more common because it's easier to scale.
They might hack your supplier's email, hack your email, or simply look at your website's "Our Partners" page and guess.
Yes, you have to so clients can pay you. But warn clients that you will never change these details via email.
It's the psychological manipulation of people into performing actions or divulging confidential information. It's "hacking the human."
Yes. Small businesses are often easier targets because they have fewer security controls than large corporations.
2FA protects your email from being hacked, which prevents scammers from reading your correspondence to craft convincing fake invoices.
A bank account owned by a third party (often unknowingly) used to receive stolen funds and transfer them to the criminal, obscuring the trail.
At least annually. Remove inactive vendors to prevent "dormant vendor" fraud where employees or hackers reactivate old accounts to pay themselves.
PayPal offers some buyer protection, but for B2B transactions, bank transfers are standard. The key is verifying the destination account.
Yes, modern accounting software uses AI to spot anomalies, like a sudden spike in invoice value or invoices sent on weekends.
This is when a real supplier adds extra items or inflates prices on a genuine invoice, hoping you won't notice. It's fraud, but from a legitimate source.
Invoicely provides secure, trackable invoicing solutions that help you maintain a clear audit trail of every transaction. Protect your business today.
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