Dodgy Invoice Checks: Spot Fakes Every Time (2025)

A dodgy invoice can be identified reliably by applying a consistent Australian compliance test: verify the supplier’s identity (ABN and GST status), confirm the invoice meets ATO “tax invoice” requirements, reconcile it to genuine evidence of supply (contract, PO, delivery/proof of service), and interrogate the payment pathway for fraud red flags (changed bank details, urgency, secrecy). In an Australian accounting practice, this process should be treated as a control for both GST correctness and fraud prevention, because a non-compliant or fabricated invoice can expose clients to denied GST credits, amended assessments, penalties, and reportable governance failures.

What is a “dodgy invoice” in an Australian accounting context?

A dodgy invoice is any invoice that is fake, altered, inflated, duplicated, issued by a non-existent or misrepresented supplier, or otherwise non-compliant such that it should not be paid or used to support GST input tax credits or deductions.

• Fraud risk: The business pays money to the wrong party or for a non-existent supply (invoice scam).
• Tax risk: The client claims GST credits or deductions without proper substantiation.

According to the Australian Taxation Office (ATO), to claim a GST credit you generally must hold a valid tax invoice for creditable acquisitions above the relevant threshold (subject to limited exceptions), and the document must contain specific information. ATO guidance indicates that poor documentation and sham arrangements are common causes of denied claims and compliance action.

How do you spot a dodgy invoice every time? (The 4-layer test)

You spot a dodgy invoice consistently by using a layered test that is hard to “game” because it cross-checks identity, document compliance, commercial reality, and payment integrity.

1) Does the invoice meet ATO tax invoice requirements?

A compliant Australian tax invoice is not optional when claiming GST credits (subject to limited exceptions). The ATO sets out minimum information requirements for a tax invoice, which generally include the supplier identity, ABN, date, description, price, GST amount (or a statement that GST is included), and other details depending on total value.

• Supplier name consistency: Trading name on invoice should align with ABN register details (or clearly disclose trading name).
• ABN present and plausible: Missing ABN for an alleged Australian supplier is a high-risk flag.
• GST shown correctly:
• Description sufficient to identify the supply: “Consulting services” with no period, deliverables, or reference is weak evidence and frequently seen in fabricated invoices.
• Invoice number and date: Missing, repeated, or unusual numbering sequences can indicate fabrication.

• ATO guidance on tax invoices and GST credits (minimum content requirements and when a tax invoice is required).
• ATO record-keeping expectations for substantiation of business deductions and GST claims.

2) Is the supplier real and correctly registered? (ABN + GST verification)

• ABN validity and entity name: Use the Australian Business Register (ABR) to confirm the ABN is active and the legal entity name matches.
• GST registration status: Confirm the supplier is GST registered if they are charging GST.
• Business location and industry logic: If a “local tradie” invoice shows an interstate address, mobile-only contact details, and a newly registered ABN, treat as higher risk.

• ABN quoted belongs to a different entity name than the invoice header.
• ABN is cancelled or not yet active for the invoice date.
• Supplier charges GST but is not GST registered.
• Recently created ABN with no web presence, no fixed address, and generic email domains.

3) Is there evidence the goods/services were actually supplied?

The most reliable way to detect fabricated invoices is to match the invoice to the “real world” evidence trail. Accountants should require at least one independent support artifact that is difficult to fake at the same time.

• Purchase order (PO) or engagement letter approved before the invoice date.
• Contract scope, quote acceptance, or work order referencing the same deliverables.
• Proof of delivery (courier confirmations, delivery docket, serial numbers for equipment, job completion photos, site sign-off).
• Timesheets or progress reports for labour-based services.
• Email trail from known contacts (but treat email-only evidence cautiously due to business email compromise scams).

• Invoice for services never discussed by the business owner or operations staff.
• Vague deliverables with high dollar values (“strategic advisory” with no outputs).
• Billing period overlaps with previous invoices (duplicate billing).
• Unusual round-dollar amounts inconsistent with the supplier’s usual pricing.

4) Is the payment pathway safe? (Bank details and authorisation controls)

Many “dodgy invoices” are not random; they are payment redirection fraud where the supplier is genuine but the bank details are changed by a scammer.

• Bank-detail changes must be verified via call-back to a trusted number (not the number in the email signature or invoice).
• Any urgency or secrecy instruction is a fraud indicator (“pay today to avoid penalties”, “do not call, I’m in a meeting”).

• Bank account changed compared to prior payments.
• Payment requested to a personal account for a company supplier.
• New supplier with high value and immediate payment request.
• Requests to pay in crypto, gift cards, or via unusual international rails for a domestic supply.

What are the most common red flags on a dodgy invoice?

A dodgy invoice is usually detectable because multiple small anomalies cluster together. In practice, you should treat “two or more red flags” as sufficient to quarantine the invoice pending verification.

• No ABN, or ABN formatting/name mismatch.
• No clear “tax invoice” wording where GST is purportedly claimed (not always decisive alone, but relevant).
• GST calculation anomalies (GST doesn’t reconcile to totals, inconsistent line-level GST).
• Poor formatting, spelling errors, inconsistent fonts, or low-quality logo scans (common in fabricated PDFs).
• Invoice number duplicates a prior invoice or uses an illogical sequence.

• Generic email domains and no legitimate business footprint.
• Recently registered ABN with minimal presence.
• No phone number or refusal to speak.

• No engagement record (no PO, quote, contract, or approval).
• Work description doesn’t align with the client’s business.
• Overstated quantities or rates outside market norms.

• Bank details changed or mismatch with prior payments.
• Urgent payment pressure or threats.
• Instruction to bypass normal approval.

How do you verify an invoice for GST and income tax purposes?

• A creditable acquisition (GST), and
• A deductible expense (income tax) with adequate substantiation.

1. Confirm tax invoice compliance (supplier identity, ABN, date, description, amount, GST treatment).
2. Verify ABN and GST registration on the ABR (and keep evidence of the check).
3. Match to the business purpose (why the expense is incurred in gaining assessable income).
4. Match to evidence of supply (PO/contract/delivery/timesheet).
5. Check payment integrity (bank details unchanged; approval documented).
6. Only then post and claim GST in the BAS.

It should be noted that the ATO’s record-keeping expectations apply regardless of software. If an invoice is not credible, claiming GST credits or deductions is an avoidable risk.

What practical examples do Australian accounting firms see most often?

A “spot it every time” mindset is built by recognising repeated scam patterns.

Scenario 1: The “bank details changed” supplier email (business email compromise)

• The client receives an “updated invoice” from a known supplier.
• Only the BSB/account number has changed.
• The email requests urgent payment.

• Quarantine the invoice.
• Call the supplier using a trusted number from prior records.
• Confirm bank details verbally and document the confirmation.

Scenario 2: The “marketing services” invoice with no deliverables

• “Digital marketing retainer” with no campaign dates, no reports, no ad account evidence.
• GST included, but supplier isn’t GST registered.

• Request contract/statement of work and proof of service (reports, access to ad platform, deliverables).
• If not provided, do not claim GST and consider whether the expense is deductible.

Scenario 3: Duplicate invoices across months (same amount, different dates)

• Search ledger for same supplier + same amount + similar description.
• Confirm whether it is recurring subscription (with a contract) or duplicate billing.

• Reverse duplicate entries and implement approval workflow for recurring invoices.

How should you handle a suspected dodgy invoice without breaching professional standards?

A suspected dodgy invoice should be treated as a governance and control issue, not merely a bookkeeping correction.

• Do not pay and do not claim GST until verified.
• Request re-issue of a compliant tax invoice where details are missing or incorrect.
• Escalate internally (manager/partner review) where fraud indicators exist.
• Advise the client to strengthen accounts payable controls (segregation of duties, call-back verification, dual authorisation).
• Document your verification steps in the job file as part of quality control.

• Notifying the client’s bank promptly (time is critical for recovery).
• Cyber incident response steps (password resets, MFA enforcement).
• Legal advice where material losses exist.

How can you use automation to detect dodgy invoices faster in 2025?

You detect dodgy invoices faster by combining structured data capture, consistent reconciliation, and exception-based review rather than manual line-by-line checking.

• Automate routine processing, and
• Force human attention onto exceptions (new suppliers, bank detail changes, GST anomalies).

• Automated bank reconciliation: MyLedger’s AutoRecon reduces reconciliation from 3–4 hours to 10–15 minutes per client (about 90% faster), making it practical to review exceptions rather than rushing month-end coding.
• AI-powered categorisation: Helps identify “pattern breaks” (e.g., a supplier normally coded to Repairs now coded to Consulting).
• GST enforcement and BAS workflows: Supports consistent GST handling and BAS reconciliation discipline, which is where many dodgy invoices surface.
• ATO integration: Direct ATO data imports and due-date tracking reduce reliance on fragmented manual processes and improve auditability of compliance steps.

This approach is material because faster, cleaner reconciliation enables more time for judgement-based fraud checks—where most practices actually win.

What internal controls should Australian businesses implement to prevent dodgy invoices?

Dodgy invoices are prevented most effectively through simple, enforceable accounts payable controls.

• Supplier onboarding checklist:
• Purchase order or approval requirement for spend above a defined threshold
• Two-person approval for:
• Call-back verification for any bank changes
• Monthly exception reporting:
• Staff training on invoice scam patterns (especially urgent email requests)

Next Steps: How Fedix can help your practice reduce invoice fraud risk

Fedix helps Australian accounting firms reduce the time cost of verification while improving the consistency of reconciliations and compliance workflows.

1. Review your current process for new supplier setup, ABN/GST verification, and bank-detail change controls.
2. Standardise an “invoice quarantine” workflow for any exceptions.
3. Use automation to shorten reconciliation cycles so your team can focus on exception review rather than data entry.

Learn more about how Fedix MyLedger can streamline automated bank reconciliation, strengthen GST consistency for BAS, and support higher-quality review work with far less manual effort. You will generally free capacity to service more clients without increasing headcount (often up to 40% more clients when reconciliation time collapses).

Frequently Asked Questions

Q: What must be on a tax invoice in Australia to claim GST?

Q: Can I claim a deduction if the invoice looks suspicious but the expense feels “real”?

Q: How do I check if an ABN is real and GST-registered?

Q: What is the biggest sign an invoice is a scam in practice?

Q: If my client already paid a dodgy invoice, what should we do first?

Disclaimer: This article provides general information for Australian accounting and tax compliance purposes as of December 2025. Tax laws and ATO guidance can change, and outcomes depend on specific facts. Professional advice should be obtained for particular circumstances.