Swedish companies lose more to fraudulent invoices than average, according to a new global survey from the SaaS company Medius. Meanwhile, CFOs seem to have difficulty estimating the exact amount their companies are losing to fake invoices, and the transition to more efficient digital systems is slow.
When financial managers at Swedish companies have to estimate the amount they have lost to invoice fraud in the past 12 months, the average is SEK 3.5 million. That is half a million (16%) more than the global average of 3 million and also far more than the neighboring countries of Finland (2.6 million), Denmark (2.5 million) and Norway (2.6 million).
This is revealed in a global survey from Medius, a leading supplier of automated invoice and payment solutions. In the survey, finance managers at 2,750 companies across several markets (of which 255 in Sweden) answered questions about how invoice handling looks like. The survey shows that fraud is one of the biggest challenges facing companies.
When Swedish finance managers estimate how many cases of invoice fraud their company has experienced during the past 12 months, the average in Sweden ends up at 14, which is higher than the average in Finland, Denmark and Norway. The result is summarized in the report “The Financial Professional Census report 2022” which is released today.
Although today there are programs that automate invoicing and help companies easily detect fraud, the report shows that a large part of the daily financial and invoicing work at Swedish companies is still done manually and inefficiently.
“It is frightening to see how much Swedish companies lose from invoice fraud. It is a cost that could be avoided with better digital tools and routines. The fact that Swedish companies are also hit harder than the global average is worrying. They would have a lot to gain from digitizing and automating“, says Jim Lucier, CEO at Medius.
The survey shows that the majority of CFOs at Swedish companies (64%) believe that their company’s software for invoice management is outdated, which is more than any of the neighboring countries Finland (51%), Norway (57%) and Denmark (35%). In addition, only one in four companies in Sweden (25.5%) uses e-invoicing instead of paper and email, while in Denmark almost half of the companies (46.5%) have replaced traditional alternatives for invoicing.
Inefficiency breeds frustration
The report also shows that two out of five financial managers at Swedish companies believe that repetitive tasks, such as manual handling of invoices and inefficient processes, are one of
their biggest frustrations in daily work. One in three financial managers also believe that they do not have time to prepare their financial statements on time, and more than half answer that they do not have time to pay supplier invoices on time.
“Manual processes in invoice management not only take a lot of time, but also lead to unnecessary stress, which in turn makes it more difficult to catch up and detect fake invoices“, continues Jim Lucier.
But it’s not just the use of digital tools that seems to need a boost. The cooperation between the various departments also seems to be worse in Sweden. When asked if the finance and purchasing departments work separately from each other, 34% in Sweden agree, while the corresponding figure is only 18% in Finland, 15.5% in Norway and only 3.8% in Denmark.
Big dark figure for invoice scams
Even though a full 95% of the companies in the survey have identified fake invoices in the past year, it is difficult to say exactly how big the problem is, as the number in the dark is large. Only 67% of finance managers in Sweden have an estimate of how big a leak that invoice fraud has meant financially, 16% do not want to give an answer to the question and a further 16% admit that they lack an estimate of the financial damage.
“Despite the alarming numbers, we now know that there is a high number of blackouts. The challenge with fraudulent invoices is obvious, companies lose both time and money. By automating the process with AP automation, you can stay ahead of the curve and fight fraud in a timely manner,” concludes Jim Lucier.
However, the survey shows some glimmers of light. Among the finance managers who have been affected by automation at the company, 42% believe that payments have become smoother and 41% have noted that suppliers have become faster.
Kevin Permenter, Research Director, Financial Applications at IDC comments on the survey: “Over the past five years, we have seen how finance and procurement teams have struggled to find workable strategies for global economic fluctuations and rapid digitization. Not surprisingly, companies are struggling to meet changing customer expectations with increased risks and vulnerabilities and the challenges posed by the global supply chain. It’s a tough environment even for the strongest teams.”