Our Bookkeeping & Finance Blog

How To Protect Your Business from Fraud With e-Invoicing (And Improve Your Business Overall)

fraud

Electronic invoicing is fast becoming the preferred method of invoicing, both in Australia and around the world. E-invoicing is a safer and more secure method of protecting your business against debilitating fraud and online scams. It helps you get paid faster, improving your business cash flow and, ultimately, your bottom line.  

What is e-invoicing?

E-invoicing is the automated digital transaction of invoice data between suppliers’ and buyers’ software through a safe and secure network backed by a government platform.

Businesses can connect and perform transactions immediately, with both parties gaining complete visibility and security of financial exchanges in real-time.  

How does e-invoicing prevent fraud?

Invoice scams have become a common occurrence. In many cases, it is a highly sophisticated scam that can go unnoticed until it’s too late. When invoices are sent via traditional methods such as email, scammers can hack into a business’ server or email software and amend the bank account details on the invoice being sent. They change the Supplier’s bank details to their own, thus diverting payments to the scammers’ bank. They may also send fraudulent emails advising of bank account changes.

In most cases, once money is transferred to a fraudulent account, it becomes difficult and complicated to retrieve the funds. If successful, it may take several months for the funds to be restored, negatively impacting your cash flow and profits.

Implementing e-invoicing prevents this type of fraud as invoices travel directly from one accounting system to another, mitigating the possibility of hackers intercepting the invoices and redirecting funds.

Additional benefits of e-invoicing

  • Streamlined efficiency – The tedious process of manually entering, printing, and posting invoices is no longer necessary. Electronic invoicing provides a single platform to manage your accounts payable information and functions. Business users can easily access and sync data between various systems and devices without the risk of content duplication. Outsourcing this process creates an abundance of extra time for staff to perform other duties that are integral to the business’s success. 
  • Faster payments – The payment periods for invoices usually begins upon receipt of the invoice. An e-invoice is immediately available to the recipient so that payments can be processed faster. The Australian Government will start implementing e-invoicing on 1st July 2022. They have committed that e-invoices will be paid within 5 business days. If this does not occur, they will pay interest on the delayed payment.
  • Easier archiving – As required by law, businesses must store invoices that are readily accessible in the event of a tax audit. Paper invoices are not well suited for long-term storage. They are vulnerable to fire, misfiling and water damage. With e-invoicing, invoice data is readily available in electronic form, attached to the transaction and integrated into an electronic archiving system. Data can then be protected with regular backups, allowing information to be stored and accessed as needed.
  • Increased accuracy and transparency – Electronic invoicing improves visibility into invoices, purchase orders, supporting documentation, and contracts, providing detailed audit trails. This end-to-end tracking allows invoice validation, approvals, and payments in real-time. 
  • Reduced risk – Greater visibility into business transactions also means a reduced risk of human error, duplication, fraud, or oversight, saving business owners countless hours and resources in the time generally used for cross-checking invoice paperwork. With an automated system, there is minimal room for human error or other factors which may affect the financial processing cycles.
  • Insights into spending and savings – e-invoicing allow your business to track cash inflows and outflows. This helps you and your management team identify where and how money is moving and where opportunities may be for saving money, resulting in more informed decision making and saving valuable time and resources.
  • Reduce carbon footprint – By switching to e-invoicing, your business can eliminate paper-based invoices and improve energy efficiency. This reduces the wastage and costs associated with paper processes used in your business.

E-invoicing is one of the most strategic steps you can take to protect your business from invoice fraud and streamline and simplify your processing cycles for a more successful business overall.

Are you ready to set up your e-invoicing? Contact Numble today for expert advice and assistance in setting up e-invoicing in your accounts system.