Fraud protection may be the last thing that comes to mind when running a business. The fact is, fraud is a situation that needs the attention of any business owner. Like any crime, fraud preys upon the weaknesses of your business. Every business is different and has different areas of weakness. Small businesses are at greater risk of fraudulent activity in the workplace. Unfortunately, business fraud has become so common that companies have spent billions of dollars over the last several year on fraud detection services. Like any crime, fraud preys upon the weaknesses of your business.
Business fraud has become such a frequent crime partly because many employees have access to important data systems. As a business owner, you stand to lose a lot. The first preventative approach when it comes to reducing fraud is letting your workers know upfront you will be monitoring and looking out for it. There are several other measures to help prevent fraud in your business operations.
1. Conduct background checks to avoid business fraud.
2. Work with an expert to discover weaknesses in your business operations.
3. Create a system of checks and balances.
4. Schedule surprise audits.
Consult an expert in fraud detection to discover any weaknesses that could put your business at riskNo two businesses will have the same risks since each one is different. Still, there are some problems that seem to consistently affect most businesses. Again, hiring practices is a big one. You should always follow up interviews by checking out references and performing background checks when necessary. An accountant and attorney well versed in financial fraud detection business can help you analyze your business structure for any problem areas that could go unnoticed.
Create strong internal controls for fraud protectionCreate a system of checks and balances within your organization. No 1 person should have access to everything. For example, the person responsible for writing check on your business account for expenses should not be the same person who balances the check book. This is a clear conflict of interest.
Conduct surprise company audits to keep everyone on their toes for additional fraud protectionIf your employees are aware that a company audit could occur at any time, they will be much less likely to become involved in fraudulent activity.
- One of the top ways to stop business fraud in its tracks is by getting tips from other employees. You should consider establishing a third party hotline that gives callers complete anonymity when they report suspicious activity.