Sunday, January 30, 2011

Invoice Fraud

Many organisations at some time will receive an invoice for goods or services that the organisation did not receive. These may be opportunistic fraud from someone external to the organisation that will be sending small dollar value invoices to a large number of businesses in the hope that due to the small amount, the invoice would not be investigated further and simply paid. These could be created by employees who are aware of a lack of controls internally that allows the employee to create false invoices and have them put through the approval process and then be paid.

So how can an organisation make sure that they are not allowing for a false creditor to be set up on the system thereby allowing false invoices to be paid? Here are some points that may assist in the approval process for new creditors:

  • A free ASIC search can show if the company is actually registered and confirm the ACN – for those not in Australia, a confirmation that the company has officially been registered with the appropriate government authority;
  • Verify the personal details of the directors – this can be done by checking the telephone directory, a Google search or other similar search;
  • Determine if the company has a credit rating;
  • Search for any legal proceedings against the company – many courts have an online system of checking matters currently before the court as well as those that had been finalised;
  • Check the telephone directory to determine if the company is listed; and
  • Confirm the trading address through means such as Google Maps.