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Fighting back against invoice fraud

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‘Fighting fraud: when to use civil and criminal remedies’

By Neil Robertson, CEO of Compleat Software

The effect of invoice fraud on SMEs is rarely discussed – but collectively, it costs these organisations £9bn every year. And it’s not just SMEs that are affected – Patisserie Valerie recently discovered a £40m ‘black hole’ in its accounts, due in part to invoice fraud. So if you’re running a business, what can you do to fight back against it?

How invoice fraud happens 

Invoice fraud isn’t sophisticated criminal masterminds hacking into your systems and stealing all your data – it’s more about manipulating people through holes in the accounts payable process. One typical case might be a fraudulent individual sending an invoice marked late to your finance team with an amount that’s just low enough that nobody senior has to sign off on it. Other methods used by fraudsters involve replicating a legitimate invoice or inflating its price.

The common threat is inattention:invoice fraud operates on the assumption that nobody will look closely at the document or flag any problems. It’s therefore no surprise that businesses where the left hand and the right hand aren’t necessarily on speaking terms tend to be the most common victims.Poor internal communication can be very expensive.

And it’s not just SMEs who fall prey to such scams –Dell recently fell victim to £1m worth of invoice fraud over the course of five years. In another case, a single fraudulent invoice had been running for over a decade; while it was only a small amount in and of itself, the cumulative cost to the business was almost £10,000.

If it sounds like the kind of crime almost anyone could commit, that’s because it is. It exploits the simple fact that running a business involves spinning a lot of plates and keeping a lot of people happy – and that there often isn’t time to give innocuous-seeming invoices the attention they require.

Businesses must remain alert to the problem of invoice fraud and actively look to plug the holes in their processes. If you’re running a business, that means working together with your accounts payable department to manage invoices and creating a plan to spot fake invoices before they become financial losses.

Preventive measures

Paying forensic attention to your invoices will help, but businesses have finite people and finite time. When one person in the finance team is wearing multiple hats, you can’t reasonably expect them to devote the necessary time and resources to accounts payable. If the responsibility for handling and inspecting invoices falls on one person, unnecessary errors will occur.

Since invoice fraud exploits ignorance, education should be your company’s priority. Letting your team know about the problem, and how they can help counteract it, can go a long way: brief them on the dangers of invoice fraud and provide some best practice tips.

Technology can also help. If you haven’t got the internal resources to check every invoice, the right software solutions can speed up and simplify the process of safeguarding against fraudulence. While technology rarely slots in instantaneously, the time spent adjusting to it and learning how to use it will pay off in the long-term.

Procure-to-pay systems can help alleviate the frustration of day-to-day accounting: streamlining expenses, purchase orders, and of course, invoice management. You can usually pick and choose the features that are most relevant to you, but if you’re looking to fight invoice fraud specifically, select something with integrated verification.This essentially means that new suppliers must be vetted and authorised before invoices are approved – and that any attempts to change information are flagged in advance of payment.

Long-term protection

The responsibility of preventing invoice fraud often falls to the accounting team – accounts payable in particular. But invoice fraud is something that affects the whole business, and the whole business should be aware of it and work to prevent it. One route to stopping invoice fraud in its tracks is simple, open dialogue: you can’t deal with a problem if you don’t talk about it. The other is finding and implementing the right technical solutions. Embracing procure-to-pay technology will give you the time, the space, and the peace of mind you need to stop worrying about invoices and start focusing on what really matters.

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UK delays review of business rates tax until autumn

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UK delays review of business rates tax until autumn 1

LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.

Many companies are demanding reductions in their business rates to help them compete with online retailers.

“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.

Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.

($1 = 0.7152 pounds)

(Writing by William Schomberg, editing by David Milliken)

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Discounter Pepco has all of Europe in its sights

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Discounter Pepco has all of Europe in its sights 2

By James Davey

LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.

The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.

Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.

“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.

To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.

The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.

Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.

Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.

That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.

“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.

Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.

Sales rose 3% to 3.5 billion euros, reflecting new store openings.

($1 = 0.8279 euros)

(Reporting by James Davey; Editing by David Goodman)

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Fashion-focused livery launch reveals new colours for Gasly, Tsunoda in 2021

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Fashion-focused livery launch reveals new colours for Gasly, Tsunoda in 2021 3

Scuderia AlphaTauri debuted their colours for the 2021 Formula 1 season as drivers Pierre Gasly and Yuki Tsunoda unveiled the team’s new look with the livery for their AT02 racecars. The setting was a fashion-forward launch in the all-new showroom of AlphaTauri, Red Bull’s premium fashion brand.

Salzburg (AUSTRIA) – Formula 1 team Scuderia AlphaTauri served up a stylish preview of the new F1 season with a presentation of its 2021 livery alongside key looks from the upcoming Autumn/Winter 2021 collection of Red Bull’s premium fashion brand, AlphaTauri. The launch – held at AlphaTauri’s new showroom in Salzburg, Austria and presented digitally – marked the first time that drivers Pierre Gasly of France and Yuki Tsunoda of Japan have appeared together as teammates.

After a successful first season racing in AlphaTauri colours, the Italian outfit is looking to challenge the top of the ultra-competitive midfield in 2021, and the two young drivers have been assigned clear-cut roles. Gasly is Team Leader. The 25-year-old, who made his Formula One debut with the team in 2017 under its former name, Scuderia Toro Rosso, has earned two F1 podiums. During the 2020 campaign, Gasly’s maiden win at Monza was a defining moment for him and the team under its new name.

Tsunoda, 20, is the first Japanese driver to race in F1 since 2014, his promotion coming off the back of a fast, four-season trajectory from winning the 2018 F4 Japanese Championship and finishing third in the 2020 FIA F2 Championship to entering the top-level ranks this year. Expectations are high for his rapid style of learning to complement the experience of Gasly.

“The decision to go for Pierre and Yuki in 2021 was taken because Scuderia AlphaTauri’s philosophy is still to give talented young drivers from the Red Bull Junior Program the opportunity to step up to F1 and to educate them – this is why Yuki now gets his chance,” explained Team Principal Franz Tost. “With Pierre on Yuki’s side we have an experienced driver, who can help our Japanese rookie to develop faster, but at the same time we can aim for good results. I think this pair is the best possible scenario to achieve both our targets, and I’m also confident this will be a successful one.”

In 2020, Scuderia AlphaTauri won best livery by a landslide, and the team’s all-new, matte blue and white racecar livery took center stage with the drivers at the fashion event, anticipating the 2021 model that will debut at pre-season testing in Bahrain on 12 March. The test is the precursor to an unprecedented 23-race schedule, and in preparation for the demanding calendar both drivers have spent time at Red Bull’s Athlete Performance Center for intense fitness testing.

“I’m ready to take on the role of team leader. Yuki is a very quick driver, and he will help us move the team forward – we will work together to achieve that,” said Gasly, the team’s all-time top points scorer. “I really believe last year was the team’s best in terms of the way it worked, the development, the performance and the way it managed the race weekends. I’m always hungry for more, and I’m sure we can achieve great things in 2021.”

Tsunoda, who was honored with the Anthoine Hubert Award for best Formula 2 rookie in 2020, added, “I’ve been lucky enough to spend some time with Scuderia AlphaTauri ahead of the season, so I’m already developing strong relationships and learning a lot from them – including Pierre, who is an incredible talent. My main goal is to learn quickly and deliver results as soon as possible, and I’m really excited to get started.”

The launch at the AlphaTauri Showroom not only gave Gasly and Tsunoda a preview of the AlphaTauri Autumn/Winter 2021 fashion collection, but the drivers had the chance to select their new off-grid looks ahead of the season start.

Ahmet Mercan, CEO AlphaTauri, summarized: “This is a triple reveal at a unique point of time: a new AlphaTauri Showroom where fashion meets F1, a first look at the AW21 AlphaTauri collection and the unveiling of the new Scuderia AlphaTauri F1 livery and driver pairing.”

Scuderia AlphaTauri fans don’t have long to wait for racing action: The FIA Formula 1 season kicks off at the Bahrain Test on 12-14 March, in preparation for the Bahrain Grand Prix on 28 March.

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