Numerous businesses are cheated out of millions of dollars every year by false vendors.
Companies just like yours are invoiced for goods or services that were never delivered.
Phony invoices, once paid, will often be followed by additional billings for publications, services, or supplies not delivered. Such schemes are successful because many businesses have slipshod procedures for approving and paying bills.
To make their invoices seem valid, some scam artists will call your business and pose as a vendor. For example, they call to "confirm" machine model numbers so that their phony invoice can refer to something your staff will recognize.
Here are some techniques that should reduce the chances that your company will fall prey to a billing scam:
- Inform your staff that they are never to give equipment model or serial numbers to callers. If the vendor is legitimate, he will already have the necessary numbers.
- Payments should be made only when supporting documents such as invoices, receiving orders, purchase orders, and packing slips have been reviewed and approved.
- Always pay on the original invoice only, do not pay on copies or duplicates.
- Payments should not be made on monthly statements that can include prior-paid items. Also, monthly statements seldom have the detail necessary to determine legitimate charges.
- Mark on the face of the invoice the date of payment and the check number.
Another scam used by some mail-order firms is to send solicitations that look very much like invoices. The flyers are actually legal, but these borderline invoices are designed to make you believe you owe for some prior order. They use language such as "enclose your check to get proper credit on your account." The account they are referring to is the one you are about to set up when you mail back a payment and place an order for the item mentioned.
You might want to review your company's purchasing and paying policies to make your company less of a scam target.
If you would like assistance, please contact the CPAs of Kenneth D. Eichner, P.C. We are here to help your business run better.