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Be Careful! Fraudulent Sales Orders Are On The Rise

Be aware and take action ...

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Posted by Roger Eddowes on 27/04/2020 @ 8:00AM

During the Coronavirus outbreak, many small businesses are desperate to keep the cash flowing. I recently heard of a company receiving a big order from an existing client and both the size and urgency set off alarm bells for them ...

Be careful with those new sales orders as they may be fraudulant!

Be careful with those new sales orders as they may be fraudulant!

copyright: glebstock / 123rf

Another business got a number of smaller orders from a range of new customers with similar addresses. With them offering delayed payment terms as standard, they were a bit curious as to why they had a sudden jump in sales.

"Be careful with anything out of the ordinary!"

We shouldn't just accept outlier orders at face value, especially when you offer delayed payment terms. Remember, if something seems too good to be true then it probably is.

There are a number of things you need to think about with new customers:

  • Why is the new customer okay with any price you give them?

  • Why do they seem so pressed for time and eager to get off the phone?

  • Why do they want the order so quickly?

If you suspect there is something wrong, then there probably is!

Don't just take the caller at face value. Always do an internet search for the company name and check email addresses against the company domain. Are you sure that represents the multi-national company they claim to?

Use Google Earth to check out the address given when a new order was placed. If it's a derelict building or a freight-forwarding address then this could be a fraudulent order. Would an IFA order a new laptop then request it be delivered to a pub?

And some clever scammers even transpose street numbers or postcodes on their ship-to locations so that the delivery address is very similar to the official company address, but not quite.

"If in doubt, then request payment before the order is dispatched!"

When it comes to existing customers, your guard could be down. Businesses large and small can have their email breeched and you could receive an official purchase order from an email address you trust.

Watch for anything out of the ordinary. Is the shipping address different? Is the size of the order abnormal? Did the email come from a .net domain when it usually comes from a .com one?

When something changes, you need to validate that the order is correct or you could be left out of pocket when you request payment and your valued and trusted customer hasn't got a clue what you're talking about.

If you know your customer well, call them using a phone number you have used before and speak to a known contact. If you don't know them that well, phone the number on the website (not the purchase order) and ask to speak to the accounts team about the order.

And if your existing customer is ordering something they normally never do, especially in unusual quantities, that could be the red flag you need to check they are who they say they are and that the order is real.

"Fraudsters are becoming more and more sophisticated and scams are not as easy to spot as they used to be!"

We all want to keep out cashflow going in these uncertain times, but for the sake of a few extra minutes and a little extra vigilance, you can save yourself a lot of trouble by ensuring both new and existing customers are who they say they are and that the orders they are placing with you are the real deal.

Until next time ...

Business Godparent


Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more about how to spot fraudulent sales orders, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how the Business Godparent can help you.

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About Roger Eddowes ...


Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.