How to Protect Your Australian Business from Expense and Invoice Fraud

How to Protect Your Australian Business from Expense and Invoice Fraud

Understanding the fraud landscape in Australia

Fraud remains a significant challenge for Australian businesses, with scammers employing increasingly sophisticated tactics to exploit vulnerabilities in expense and invoice processes. This trend has serious implications for businesses’ bottom lines. In fact, scam reports from businesses jumped by 27.9% from 2022 to 2023, with companies reporting $29.5 million in direct losses in 2023 alone.

Beyond the immediate financial losses, fraud can severely impact a company’s reputation and operations. A single fraudulent invoice paid or an expense scandal can erode trust with suppliers, customers, and employees. Clients may become hesitant to do business if they perceive weak financial controls, and vendors might grow wary of payment issues. The reputational damage from a publicised fraud incident can linger, affecting a business’s brand and credibility long after the money is gone. For mid-sized businesses striving to grow, the dual hit of financial loss and lost trust can be devastating. This is why understanding the fraud landscape and proactively safeguarding against these threats is so critical.

Understanding Expense and Invoice Fraud

Expense and invoice fraud can take many forms, both external (perpetrated by scammers or vendors) and internal (perpetrated by employees). In the Asia-Pacific region, billing fraud (invoice-related schemes) accounts for about 21% of all occupational fraud cases , underlining how prevalent these methods are. ( *from Moore Australia). 

Here’s a breakdown of the most common schemes:

Each of these fraud types has been encountered by Australian organisations, and they highlight where controls can break down. Whether it is an external scam like a fake invoice or an internal issue like expense abuse, mid-sized businesses need to stay vigilant. Understanding these schemes is the first step toward stopping them. These fraudulent activities can lead to significant financial losses, reputational damage, and compliance issues for businesses.

Proactive Measures to Prevent Fraud 

Given the significant risks, mid-sized businesses should adopt a proactive stance to prevent expense and invoice fraud. Waiting until fraud occurs can mean suffering heavy losses that are hard to recover. Instead, businesses can implement a combination of process controls, oversight, and technology to deter and detect fraud early. Here are some best-practice strategies for fraud prevention that mid-sized companies in Australia can put in place:

Internal Controls & Workflows

• Separate duties: no single person controls the full payment process
• Multi-level approvals with dollar thresholds
• Digital audit trails

Fact: Lack of internal controls is the top contributor to business fraud globally.

Employee Training & Awareness

Policy Enforcement & Surprise Audits

• Clear expense and invoice policies (what’s allowed, what’s not)
• Regular audits of claims and invoices
• Flag suspicious patterns (e.g. small frequent claims under approval limits)
• Use surprise audits: they reduce losses by 50% on average

Vendor Verification & Callback Controls

Before making payments:

• Call the vendor using official contact info (never rely solely on email)
• Check ABN via official databases
• Maintain a verified supplier list

Regular Audits & Data Analysis

Use both internal and external audits to:

• Spot trends (e.g. duplicate invoice numbers
• Identify outliers (e.g. abnormally high expenses)
• Limit fraud duration through regular monthly/quarterly checks

Use Automation & AI Tools

Top 3 Benefits of Automation:

By implementing these proactive strategies, mid-sized businesses can significantly reduce their exposure to fraud. Importantly, prevention is far less costly than reacting to a fraud incident after the fact. A combination of vigilant people, robust processes, and smart technology creates a strong defense line against both opportunistic scammers and internal fraud risks.

How ProSpend Strengthens Fraud Prevention

While the above strategies can greatly reduce fraud risk, managing all these controls manually can be challenging for a growing business. This is where technology solutions like ProSpend come into play. ProSpend is an Australian-developed, AI-driven spend management platform that automates fraud prevention for businesses’ accounts payable and employee expenses. Industry analysts have noted that AI and automation are becoming essential for finance teams to streamline end-to-end processes and improve controls. 

ProSpend leverages these technologies to act as a proactive shield against expense and invoice fraud. Here are some key features of ProSpend and how they directly address the fraud risks discussed earlier:

All of these features work together to create a secure spend management process. ProSpend essentially embeds fraud prevention into each step of handling expenses and invoices. It uses artificial intelligence to continuously learn and improve its detection capabilities, meaning the system gets smarter at identifying new fraud patterns over time. 

By automating tedious checks, ProSpend frees your finance team from manual verification tasks while significantly reducing the risk of fraud. For a mid-sized business, this translates to peace of mind: you can process invoices and employee reimbursements faster, without worrying that something is being paid improperly or fraudulently. In essence, ProSpend serves as a proactive guardrail – ensuring compliance with your policies, verifying the legitimacy of transactions, and catching problems in real time before they result in lost funds

Conclusion

Fraud prevention should be a top priority for mid-sized Australian businesses. The modern fraud landscape – from clever invoice scams to internal expense abuses – poses a genuine threat to companies’ finances and reputations. As we’ve seen, the cost of complacency is high: millions of dollars are lost to business fraud each year in Australia, and even one incident can disrupt operations or damage hard-won trust. The good news is that with the right mix of awareness, controls, and tools, businesses can stay one step ahead of fraudsters. By implementing strong internal processes and leveraging automation technology, mid-sized businesses can protect themselves from the most common expense and invoice fraud schemes before they occur.

ProSpend offers a comprehensive, proactive solution to these challenges – using AI and automation to enforce controls and detect anomalies across all your business spend. Instead of manually policing every invoice and expense report, you can let intelligent systems do the heavy lifting, flagging only what needs attention. This modern approach to expense fraud prevention and invoice fraud protection allows you to scale your business without scaling your fraud risk.

Don’t wait for a costly incident to spur action. Strengthening your fraud defenses today will pay off through saved money, protected reputation, and peace of mind.

Book a demo with ProSpend to see how our platform can help your organisation stay protected against expense and invoice fraud. Take the next step towards fraud-proofing your business – ProSpend is here to help Australian businesses take control of business spend in a smarter and safer way.