Glossary
What is invoice fraud?
By Tim White · Last updated
Invoice fraud is any scheme that uses a fake, altered, or duplicated invoice to get a business to pay money it does not owe. Common forms include a bogus bill for goods that were never ordered, an imposter changing a real vendor's bank details, and the same invoice submitted twice. The defenses are process controls: approval on every invoice, verifying the details, and confirming any change to payment information out of band.
The common types
A phantom invoice bills for goods or services that were never ordered, betting that a busy payables person pays it. Business email compromise is trickier: an imposter poses as a known vendor and asks you to update their bank details, so a real payment lands in the wrong account. Duplicate submission relies on the same invoice being paid twice. Inflated quantities or prices hide inside otherwise real bills.
The controls that help
Approve every invoice against someone who knows the spend, verify any bank-detail change by phoning a known contact, and catch duplicates before payment. InvoiceJet verifies the extracted fields, flags duplicates on vendor, number, and amount, and holds invoices whose math does not reconcile, which surfaces some red flags. It does not replace approval controls or the habit of confirming payment changes, which remain your strongest defense.
Common questions
What is the most common invoice scam?
Two lead: a fake invoice for goods that were never ordered, and business email compromise, where an imposter changes a vendor's bank details so your payment goes to them.
Can software stop invoice fraud?
It helps by catching duplicates and inconsistent totals and by keeping an approval trail, but human controls, especially verifying payment-detail changes, remain essential.
Sources
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