When a person obtains money or assets from your business by deception or criminal activity, this is known as financial frauds. Unfortunately, various types of financial fraud exist, such as embezzlement or misappropriation of funds. Fraud can be committed by people within your business or outside of it.
As a business owner, you’ll have considerable amounts of cash and other assets to protect. This makes it important to be aware that fraudsters are out there, willing to prey on any vulnerabilities to their malicious intentions and be ready to protect your business from the damage they can inflict upon your business.
Important Steps to Avoid Falling Foul of Fraudsters
Fraud can tarnish the reputation of your business, not to mention threaten your business’s actual survival. Taking the steps below can make it harder for anyone to help themselves to your assets:
- Look for Professional Support
You might be running the business, but you don’t have to deal with fraud all by yourself. You can turn to fraud management solutions to identify risks and mitigate them. Fraud management can help you review processes, detect any types of fraud that have occurred and determine the root of them so you can improve security in the future.
As a business owner, you must ensure records are kept and managed accurately to prove transactions are legitimate and error-free. Handling documents well is important, so check any documents for personal or business information that you send by email, fax, or post. Avoid posting sensitive information online unless it’s on a secure server.
- Use Secure Forms of Payment
As a business, you’ll have expenses. One way to protect yourself is to use secure checks for making payments. Criminals are becoming more and more sophisticated in terms of the tools and methods they use to commit fraud. A business can protect itself with secure checks that are virtually impossible to counterfeit.
Run background checks on any person who will be handling cash or making payments before you hire them. As they become more and more involved in working with the business’s finances, you should scrutinize their past and present even more.
Be slightly wary of employees who are especially well liked in your business. Sometimes they can be fraudsters who have worked hard to earn the trust of everyone around them. Watch out, too, for any employees who are facing financial challenges. Have you placed them in the way of temptation?
Don’t just know your employees, however. Educate them, too. Whether your business is big or small, fraud can affect the entire business. It’s important to educate your employees in possible fraud and security risks. They can then report any transactions or activities they find suspicious.
- Employ and Update Security Systems
If your business allows customers to make payments online, think about implementing an identity theft protection system. This will keep the personal details and documents encrypted, making it much harder for hackers to access.
- Audit Your Books Regularly
Make a point of auditing regularly any part of the business that involves cash handling, product returns, inventory management, accounting functions or refunds. In addition to these regular audits, conduct unscheduled ones, which can help you to detect fraud in any areas of the business where there is high risk. Unscheduled audits won’t give any employee who has been committing fraud time to cover their tracks.
Despite your best efforts, a fraudster might still get their way, which is why it’s important to have some insurance cover. Of course, the insurance itself can’t prevent a fraud from occurring, but it can help the business to minimize losses and return back to normal sooner rather than later.
Exposure to fraud is one of the more unpleasant hazards of being a business owner. Taking sensible steps, however, to protect yourself against it can minimize the chances of the fraudsters gaining access to your hard-earned assets successfully.