New research from Ivalua reveals that 40% of organizations experienced invoice fraud in the past 12 months.
Organizations that lost money report an average cost of $367,000, and almost one-third of those affected (29%) lost $500,000 or more.
Compounding the damage, invoice fraud takes an average of nine days to identify, while just 27% of organizations catch it on the same day. One in five organizations required two weeks or longer to identify fraud.
“Fraudsters aren’t breaking into businesses, they’re walking straight in through gaps in supplier records,” says Stephen Carter, payments expert at Ivalua. “With AI lowering the barrier to entry, it has never been easier for an internal or external fraudster to look legitimate. Ghost vendors, hijacked bank details and impersonated suppliers are no longer opportunistic one-offs, but systematic attacks on crucial areas of the payment process. At an average of over $367,000 per incident, invoice fraud is not a back-office nuisance, and it must be treated as a boardroom priority.”
Key takeaways:
· Fraudulent changes to supplier bank details top victims’ concerns (41%), closely followed by duplicate invoicing and compromised supplier email accounts (both 39%). Ghost vendors, where a fake supplier record is created to add invoices into the payment system, worry almost a third (32%).
· Just one-quarter (25%) of organizations confirm they carry out mostly automated supplier checks with a standardized workflow and audit trail. Nearly one in five (19%) still vet new suppliers by hand through email, documents and spreadsheets. A further 6% either have no consistent verification process or cannot verify suppliers at all.
