Warning fired over "fresh air invoices"

25/02/2008

A number of fraud experts have issued a warning to relevant parties that some small and medium-sized businesses (SMBs) in the UK are resorting to dishonest activity to boost their cashflows in the short-term.

In order to leverage finance in a hurry, some SMBs are now combining "fresh air invoices" with genuine ones when dealing with their banks, according to a report from the Mail on Sunday.

The issue is becoming an increasingly serious one as more businesses find it impossible to secure traditional forms of credit and turn to invoice discounting as a solution, only to resort subsequently to fraudulent activity.

However, the experts quizzed on the subject by the newspaper suggested that firms that involve themselves in dishonest invoice discounting ultimately tend to be found out.

Meanwhile, a report in the Journal recently highlighted the flexibility that invoice discounting and factoring can provide businesses with cashflow concerns.