Purchase Orders, Invoices and Fraud

product_news on fraud

At Procurementexpress.com we’ve been saying that Purchase Orders (POs) prevent fraud for months. The conversation usually goes,

Potential customer: “So why should I buy your product?”

Procurementexpress.com: “Well, Purchase Orders help to improve your financial controls, stop purchasing errors and help to combat fraud”

We know this to be true, it stands to reason doesn’t it? Improve your financial controls and you’ll improve your ability to spot fraud.

To be perfectly honest, we haven’t really had a concrete and real world example of fraud prevention until now:

Take a look at the invoice below (we’ve redacted the company information for obvious reasons):

It is an invoice that was delivered to a customer today.

The customer is quite new to Procurementexpress.com. They signed up about a week ago and have been authorising and tracking their POs since then. I’ll tell you another time how easy it is to set up Procurementexpress.com.

We got a call…”We’ve been tracking all of our POs and everything has been working great, however,  we got this invoice and we can’t find it within the system. Can you help us to find it?”

We looked in to the system and couldn’t find any purchase order for this supplier. So we looked into the invoice further.

It became apparent very quickly that this invoice appears to be fraudulent.

On the surface, this is a perfectly good invoice. It looks real and is laid out neatly but there are obvious inconsistencies.

Lets take a closer look:

SpanishAddress

First of all, you can see the company is based at a business centre in Spain (we used Google maps). While it might not be unusual to have a supplier in another country, our customer doesn’t have a business relationship with this company, and it is difficult to prosecute a company for fraud outside of the jurisdiction of the fraud victim.

Now look at the description:

InvoiceDescription

What is Office suite, Win, 12, Business Pro? There isn’t a version of Microsoft’s Office suite with this name and a quick search on Google will suggest that there isn’t any software with this name. It’s Fraud

fraud

Finally the website address. While the website exists it doesn’t actually seem to actually sell anything and product descriptions are not filled out correctly.

Seemingly, this invoice has been generated on the chance that the finance department simply pay it and don’t ask questions. This might have happened before the company in question signed up to ProcurementExpress.com. However, with a purchase order system in place, the invoice was queried and it became obvious very quickly that it was fraudulent.

This kind of invoice is becoming more commonplace. A quick search for the “Internet Domain Registry Scam” or “office supplies scam” will show you all manner of information about similar scams.

So what have we proven?

  1. These scams do exist. We always knew they did, but we were waiting to see one in the flesh.
  2. A well organised purchase order system will show up these fake invoices straight away.
  3. Procurementexpress.com very quickly helps companies to create a well organised PO system.

Now that you have read this post, have you also suffered from fake invoice scams?

Send us a copy of a fake invoice that you have received and we’ll give you SIX months of free use of Procurementexpress.com for your team. We’ll even help you to set everything up! Actually, it only takes minutes so we’re not really giving much away there.

Email me at [email protected]

Enjoy your free copy of Profit LeaksProcurementExpress.com

Procurement Coach

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