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Invoice Fraud Red Flags: 12 Signs a Supplier Invoice Is Fake

The red flags that matter are changes and pressure, not typos.

Short answer

The strongest red flags are changes and pressure, not spelling mistakes: new bank details, a new supplier with no purchase order, amounts just under approval limits, round sums, missing tax numbers, urgency, and invoices for goods nobody received. Any one of them is a reason to check against the purchase order, goods receipt and supplier master before paying.

About the supplier

  1. A new supplier with no purchase order or requester. Ask who in the business engaged them and why.
  2. An address that matches an employee, a mail drop or a residential property for a supplier that claims to be a trading business.
  3. No tax or registration number where you'd normally expect one, or one that doesn't check out.
  4. Supplier master details changed recently, especially contact details or bank details changed shortly before a large invoice.

About the invoice

  1. Bank details on the invoice that differ from your supplier master. Pay the details on file, and verify any difference before you pay anything.
  2. Amounts just below an approval threshold, or several invoices that together exceed it.
  3. Round amounts with vague descriptions, such as "consulting services: 5,000.00".
  4. Sequential invoice numbers across months from the same supplier, which can mean you are their only customer.
  5. A near-copy of an invoice already paid, with the reference or amount slightly changed. See how duplicates get past review.

About the request

  1. Pressure to pay quickly, especially combined with a request to keep it confidential.
  2. The invoice sent to a person instead of the AP inbox, often a new or junior team member.
  3. A request to pay a different entity or a different country from the one you contracted with.

What to do when you see one

A red flag is a reason to check, not proof of fraud. Most have innocent explanations. The checks are quick:

Make the flags systematic

People spot red flags when they have time. A control spots them every time. The useful step is to turn the flags above into tests that run on every invoice, such as new supplier without a PO, bank details different from master, amount within 5% below the approval limit, and round amount over a set value. Then review the exceptions rather than every invoice.

Checklist

  • Invoice matched to a purchase order and goods receipt
  • Supplier details on the invoice match the supplier master
  • Bank details on the invoice match the details on file
  • Amount isn't split or sitting just under an approval limit
  • Requester confirmed the goods or services were received
  • Any urgency or confidentiality request escalated, not obeyed
UK and US

UK: VAT invoices from VAT-registered suppliers should show a VAT registration number. You can check it with HMRC's online VAT number checker.

US: collect a Form W-9 from vendors before paying them. Payers who file 1099 information returns can use the IRS TIN Matching service to check the name and taxpayer number combination.

Free tool

Payment Fraud Risk Score

Score a payment request against the warning signs of fraud. Free to use online.

Use the Payment Fraud Risk Score

Make it a control, not a one-off

The Invoice & Payment Fraud Defence Kit puts every payment through a Release, Hold or Pulled-from-run decision, with a bank detail change verification log, supplier checks, an incident log, a staff training record and a Fraud Defence Playbook (PDF). Excel, no macros, one-time price.

View the Invoice & Payment Fraud Defence Kit

Common questions

Does one red flag mean the invoice is fraudulent?

No. Most red flags have innocent explanations. They are reasons to check the purchase order, goods receipt and supplier master before paying.

Who usually commits invoice fraud?

It can be external, such as fake suppliers and impersonators, or internal, such as staff creating suppliers they control. The same checks catch both.

Can red flag checks be automated in Excel?

Yes. Most red flags are simple tests: a missing PO, bank details that differ from master, amounts just under a limit or round values. They can run on every invoice in a spreadsheet.

Related guides

Last updated 18 October 2026. General guidance for finance teams; check it against your own policies, systems and local rules.