Protect Against Invoice Fraud with AP Automation

Invoice fraud can happen to any business or business owner. In 2020, no less than the mighty Amazon paid out $19 million in fraudulent invoices. Shark Tank “Shark” Barbara Corcoran paid out almost $400,000. And Google and Facebook paid a combined $123 million to just one person in Lithuania (though they were later able to recoup the funds).

But it’s not just the most recognizable among us who are targeted with invoice fraud. The FBI’s 2020 Internet Crime Report found that over 19,000 large and small businesses reported falling victim to Business Email Compromise (BEC), suffering losses totalling more than $1.8 billion.

With margins so slim across the hospitality industry, just one invoice scam can make the difference between being in the black vs. being in the red. Business owners would be wise to put protections in place that protect them from losing their hard-earned cash. Here’s what you need to know about invoice fraud, what it looks like, and how the simple solution of AP automation can save businesses from the scam.

What is invoice fraud?

Invoice fraud occurs when an unauthorized third party sends fake or deliberately incorrect invoices to a business to steal money. The FBI considers invoice fraud to be one of the three biggest types of BEC, along with gift card and mortgage schemes. 

Invoice fraud is incredibly common because it’s relatively easy for scammers to pull off. All they need to do is monitor a company’s AP process and take advantage of the gaps they see. 

Types of invoice fraud

If you’ve ever run a business with paper-based AP processes, you’re probably all too familiar with the flaws in the process. Unfortunately, those flaws become catastrophic when scammers are able to exploit them.

Fake invoice fraud

Paper invoices are easily lost or damaged when they’re received at a hospitality business. Scammers who have been watching the business closely will know its most common vendors and can easily email or call to request payment to a fraudulent account based on an invoice for items that were never even ordered. They know it’s highly unlikely the team that receives vendor orders is the same team that actually processes invoices, and they know to assume that paper invoice records tend to be inaccessible.

Duplicate invoice fraud

Similar to fake invoices, a duplicate invoice scam takes advantage of the vendor order patterns. Fraudsters can call or email a business claiming to be from the vendor team and claim that an invoice was never paid. Depending on who they’re contacting, the person on the other end of the phone might not have access to accounting software and cannot confirm or verify if the payment was made. 

Even if someone from the financial management side is contacted, if paper checks are being used to pay vendors, the only way they can tell payment was actually received is if it’s been debited from the business account.

Inflated invoice fraud

We want to assume noble intent from all vendor/business relationships. Unfortunately, not all vendors act honestly. Vendors can very easily raise the prices of each item they sell over time, charging increases that are so small that they can easily stay undetected for prolonged periods. Of course, we recognize that food costs can vary greatly based on demand and seasonality, so charges can fluctuate accordingly, but this scam can also occur with contract pricing. Some vendors may hope that AP teams don’t spot the minor price changes over time and go against the contract anyway.

All three of these types of invoice fraud stem from a business’ lack of visibility into their internal AP processes. 

Learn how you can prevent inflated invoice fraud with Plate IQ Insights.

How to prevent invoice fraud

Luckily, hospitality businesses can easily take more control over their susceptibility to invoice scams. One of the best things business owners and finance teams can do to protect assets is to start digitizing invoices with AP automation.

The best invoice automation solutions don’t just digitize invoices to be stored on a cloud—they add visibility across business stakeholders and put guardrails in place to ensure that only the correct funds are sent to the correct entities at the correct time. Here’s how:

Connect with EDI feeds

Electronic data interchange (EDI) allows vendors to send invoices directly to a business’ invoice management system rather than waiting for details from a paper invoice to be manually entered. Working with vendors who use EDI drastically reduces the chance your business will be targeted with fake invoices.

Search invoices

Digitizing invoices makes them searchable. Need to know if your business received an invoice or already paid it out? Simply search the invoice number to pull up the scan (or EDI transmission) to get the details. It’s a lot less time-consuming than sifting through piles of dirty papers to find exactly the information you need and prevents scammers from charging you for a fake invoice.

Route approvals

No need to worry about the wrong person at your business sending funds to an unauthorized source. With approvals rules in place within invoice management software, invoices can be reviewed only by specific users—and only tinkered with at select stages of processing. Approval routing puts the power of the pursestrings in the hands of only a select few people at your business.

Reconcile documents

Inflated invoices, begone. AP automation solutions are able to store the information you have about contract pricing with vendors. The software can then flag every instance when the contracted price has changed. Some solutions even offer the opportunity to contact the vendor about the discrepancy directly through the software, avoiding more of those external touchpoints that scammers watch and exploit.

Protect your business with Plate IQ

If you’re ready to start protecting your business from invoice fraud today, look no further. Plate IQ offers the secure protection you need against scammers by offering complete visibility into the AP process from end to end. Just click the “Request a Demo” button at the top of this page to get started.

Protect Against Invoice Fraud with AP Automation

Invoice fraud can happen to any business or business owner. In 2020, no less than the mighty Amazon paid out $19 million in fraudulent invoices. Shark Tank “Shark” Barbara Corcoran paid out almost $400,000. And Google and Facebook paid a combined $123 million to just one person in Lithuania (though they were later able to recoup the funds).

But it’s not just the most recognizable among us who are targeted with invoice fraud. The FBI’s 2020 Internet Crime Report found that over 19,000 large and small businesses reported falling victim to Business Email Compromise (BEC), suffering losses totalling more than $1.8 billion.

With margins so slim across the hospitality industry, just one invoice scam can make the difference between being in the black vs. being in the red. Business owners would be wise to put protections in place that protect them from losing their hard-earned cash. Here’s what you need to know about invoice fraud, what it looks like, and how the simple solution of AP automation can save businesses from the scam.

What is invoice fraud?

Invoice fraud occurs when an unauthorized third party sends fake or deliberately incorrect invoices to a business to steal money. The FBI considers invoice fraud to be one of the three biggest types of BEC, along with gift card and mortgage schemes. 

Invoice fraud is incredibly common because it’s relatively easy for scammers to pull off. All they need to do is monitor a company’s AP process and take advantage of the gaps they see. 

Types of invoice fraud

If you’ve ever run a business with paper-based AP processes, you’re probably all too familiar with the flaws in the process. Unfortunately, those flaws become catastrophic when scammers are able to exploit them.

Fake invoice fraud

Paper invoices are easily lost or damaged when they’re received at a hospitality business. Scammers who have been watching the business closely will know its most common vendors and can easily email or call to request payment to a fraudulent account based on an invoice for items that were never even ordered. They know it’s highly unlikely the team that receives vendor orders is the same team that actually processes invoices, and they know to assume that paper invoice records tend to be inaccessible.

Duplicate invoice fraud

Similar to fake invoices, a duplicate invoice scam takes advantage of the vendor order patterns. Fraudsters can call or email a business claiming to be from the vendor team and claim that an invoice was never paid. Depending on who they’re contacting, the person on the other end of the phone might not have access to accounting software and cannot confirm or verify if the payment was made. 

Even if someone from the financial management side is contacted, if paper checks are being used to pay vendors, the only way they can tell payment was actually received is if it’s been debited from the business account.

Inflated invoice fraud

We want to assume noble intent from all vendor/business relationships. Unfortunately, not all vendors act honestly. Vendors can very easily raise the prices of each item they sell over time, charging increases that are so small that they can easily stay undetected for prolonged periods. Of course, we recognize that food costs can vary greatly based on demand and seasonality, so charges can fluctuate accordingly, but this scam can also occur with contract pricing. Some vendors may hope that AP teams don’t spot the minor price changes over time and go against the contract anyway.

All three of these types of invoice fraud stem from a business’ lack of visibility into their internal AP processes. 

Learn how you can prevent inflated invoice fraud with Plate IQ Insights.

How to prevent invoice fraud

Luckily, hospitality businesses can easily take more control over their susceptibility to invoice scams. One of the best things business owners and finance teams can do to protect assets is to start digitizing invoices with AP automation.

The best invoice automation solutions don’t just digitize invoices to be stored on a cloud—they add visibility across business stakeholders and put guardrails in place to ensure that only the correct funds are sent to the correct entities at the correct time. Here’s how:

Connect with EDI feeds

Electronic data interchange (EDI) allows vendors to send invoices directly to a business’ invoice management system rather than waiting for details from a paper invoice to be manually entered. Working with vendors who use EDI drastically reduces the chance your business will be targeted with fake invoices.

Search invoices

Digitizing invoices makes them searchable. Need to know if your business received an invoice or already paid it out? Simply search the invoice number to pull up the scan (or EDI transmission) to get the details. It’s a lot less time-consuming than sifting through piles of dirty papers to find exactly the information you need and prevents scammers from charging you for a fake invoice.

Route approvals

No need to worry about the wrong person at your business sending funds to an unauthorized source. With approvals rules in place within invoice management software, invoices can be reviewed only by specific users—and only tinkered with at select stages of processing. Approval routing puts the power of the pursestrings in the hands of only a select few people at your business.

Reconcile documents

Inflated invoices, begone. AP automation solutions are able to store the information you have about contract pricing with vendors. The software can then flag every instance when the contracted price has changed. Some solutions even offer the opportunity to contact the vendor about the discrepancy directly through the software, avoiding more of those external touchpoints that scammers watch and exploit.

Protect your business with Plate IQ

If you’re ready to start protecting your business from invoice fraud today, look no further. Plate IQ offers the secure protection you need against scammers by offering complete visibility into the AP process from end to end. Just click the “Request a Demo” button at the top of this page to get started.

Invoice fraud can happen to any business or business owner. In 2020, no less than the mighty Amazon paid out $19 million in fraudulent invoices. Shark Tank “Shark” Barbara Corcoran paid out almost $400,000. And Google and Facebook paid a combined $123 million to just one person in Lithuania (though they were later able to recoup the funds).

But it’s not just the most recognizable among us who are targeted with invoice fraud. The FBI’s 2020 Internet Crime Report found that over 19,000 large and small businesses reported falling victim to Business Email Compromise (BEC), suffering losses totalling more than $1.8 billion.

With margins so slim across the hospitality industry, just one invoice scam can make the difference between being in the black vs. being in the red. Business owners would be wise to put protections in place that protect them from losing their hard-earned cash. Here’s what you need to know about invoice fraud, what it looks like, and how the simple solution of AP automation can save businesses from the scam.

What is invoice fraud?

Invoice fraud occurs when an unauthorized third party sends fake or deliberately incorrect invoices to a business to steal money. The FBI considers invoice fraud to be one of the three biggest types of BEC, along with gift card and mortgage schemes. 

Invoice fraud is incredibly common because it’s relatively easy for scammers to pull off. All they need to do is monitor a company’s AP process and take advantage of the gaps they see. 

Types of invoice fraud

If you’ve ever run a business with paper-based AP processes, you’re probably all too familiar with the flaws in the process. Unfortunately, those flaws become catastrophic when scammers are able to exploit them.

Fake invoice fraud

Paper invoices are easily lost or damaged when they’re received at a hospitality business. Scammers who have been watching the business closely will know its most common vendors and can easily email or call to request payment to a fraudulent account based on an invoice for items that were never even ordered. They know it’s highly unlikely the team that receives vendor orders is the same team that actually processes invoices, and they know to assume that paper invoice records tend to be inaccessible.

Duplicate invoice fraud

Similar to fake invoices, a duplicate invoice scam takes advantage of the vendor order patterns. Fraudsters can call or email a business claiming to be from the vendor team and claim that an invoice was never paid. Depending on who they’re contacting, the person on the other end of the phone might not have access to accounting software and cannot confirm or verify if the payment was made. 

Even if someone from the financial management side is contacted, if paper checks are being used to pay vendors, the only way they can tell payment was actually received is if it’s been debited from the business account.

Inflated invoice fraud

We want to assume noble intent from all vendor/business relationships. Unfortunately, not all vendors act honestly. Vendors can very easily raise the prices of each item they sell over time, charging increases that are so small that they can easily stay undetected for prolonged periods. Of course, we recognize that food costs can vary greatly based on demand and seasonality, so charges can fluctuate accordingly, but this scam can also occur with contract pricing. Some vendors may hope that AP teams don’t spot the minor price changes over time and go against the contract anyway.

All three of these types of invoice fraud stem from a business’ lack of visibility into their internal AP processes. 

Learn how you can prevent inflated invoice fraud with Plate IQ Insights.

How to prevent invoice fraud

Luckily, hospitality businesses can easily take more control over their susceptibility to invoice scams. One of the best things business owners and finance teams can do to protect assets is to start digitizing invoices with AP automation.

The best invoice automation solutions don’t just digitize invoices to be stored on a cloud—they add visibility across business stakeholders and put guardrails in place to ensure that only the correct funds are sent to the correct entities at the correct time. Here’s how:

Connect with EDI feeds

Electronic data interchange (EDI) allows vendors to send invoices directly to a business’ invoice management system rather than waiting for details from a paper invoice to be manually entered. Working with vendors who use EDI drastically reduces the chance your business will be targeted with fake invoices.

Search invoices

Digitizing invoices makes them searchable. Need to know if your business received an invoice or already paid it out? Simply search the invoice number to pull up the scan (or EDI transmission) to get the details. It’s a lot less time-consuming than sifting through piles of dirty papers to find exactly the information you need and prevents scammers from charging you for a fake invoice.

Route approvals

No need to worry about the wrong person at your business sending funds to an unauthorized source. With approvals rules in place within invoice management software, invoices can be reviewed only by specific users—and only tinkered with at select stages of processing. Approval routing puts the power of the pursestrings in the hands of only a select few people at your business.

Reconcile documents

Inflated invoices, begone. AP automation solutions are able to store the information you have about contract pricing with vendors. The software can then flag every instance when the contracted price has changed. Some solutions even offer the opportunity to contact the vendor about the discrepancy directly through the software, avoiding more of those external touchpoints that scammers watch and exploit.

Protect your business with Plate IQ

If you’re ready to start protecting your business from invoice fraud today, look no further. Plate IQ offers the secure protection you need against scammers by offering complete visibility into the AP process from end to end. Just click the “Request a Demo” button at the top of this page to get started.

Jillian Straw

writes for Plate IQ, covering technology in the hospitality industry from a background in restaurants and operations management.

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