When you run your own business, you never quite know what’s around the corner. Unfortunately, some of these surprises may exist in the form of fraud. Businesses are exposed to various types of fraud: skimming; payoffs and kickbacks to employees in exchange for information about the company; invoice fraud, in which genuine invoices are intercepted and replaced with fraudulent ones that have details changed; embezzlement; and theft of inventory are just a few. So as a business owner, you’re at risk. Thankfully, there are ways to protect you business against fraud and reduce the chances of becoming the fraudsters’ next victim.
1. Educate Yourself about Fraud
Before you do anything else, you’ve got to educate yourself about the different types of fraud and the impact they can have on your business. Fraud can have a hugely damaging financial impact, erase your partners’ and clients’ trust in your organization, and taint your reputation. Ultimately, it could put you out of business.
2. Then Educate Your Employees
It’s important that you also involve your employees in protecting the business against wrongdoers. Hold regular training sessions in which you raise awareness of different security threats (online and offline) and train them in fraud prevention techniques.
Inform all your employees of the company’s policy on the use and handling of confidential data, including client data, financial data and employee data. Employees who don’t know about the policy could make a mistake and fall for scams much more easily.
3. Perform Regular Audits on Technology and Security Systems
Computer systems are a major target, and talented hackers will always fancy their chances, so you should safeguard your computing systems and other tech as much as possible. A solid firewall can help to protect your data and a good antivirus can detect potential breaches early. Ideally, you should perform regular audits of your tech and security systems, and of any other areas that are at risk of fraud, to identify where you need to tighten up security.
4. Protect Your Bank Account and Financial Systems
As a business owner, you should have separate accounts for business and personal expenses. If not, open one and track all your expenses so you can detect any suspicious outgoings. If you issue employees company credit cards, check the credit card provider has suitable fraud protections in place. If you tend to make payments by check, use a supplier that incorporates features into their checks which protect you against fraud. You can also use digital wallets and online banking to minimize paperwork, which can fall into the wrong hands easily.
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5. Run Background Checks
A person might be qualified, but can you trust them? Go beyond asking for work references and looking at their employment history, and conduct a background check before hiring someone. These aren’t expensive and are worth every dollar and more if they identify someone who might have siphoned stock or cash by the bucketload from you. Be sure to obtain the proper permission before you run such a check.
6. Introduce anonymous Reporting for Employees
Introducing a system by which employees can report anonymously any suspicious behavior or activities in the workplace is a superb way to prevent fraud. This could be as simple as a tips box and would allow you to act early, preventing significant financial losses. Be careful, however, to take steps so that employees can’t abuse the system to settle personal grudges against other employees.
Conduct Unscheduled Internal Audits
Make accounting, inventories and work processes all subject to unscheduled internal audit because all these features of the business can be changed in time for scheduled ones. Unscheduled internal audits won’t give employees time to prepare. If they know one could be on the horizon, they won’t feel the temptation to commit any fraud in the company.
It’s a sad fact of business ownership that you face exposure to fraud. By taking the steps above to protect your business against fraud, however, you can minimize the risk of fraudsters striking and making it a wasted day at the office for them.
