Keeping fraud at bay.
Elizabeth Wasserman, writing for Inc. magazine provides some useful tips on keeping fraud out of your business. She reports that a 2009 survey of 3,000 small, medium and large US businesses revealed that almost 90% had experienced fraud of some kind.
The sources of business fraud are numerous. Employees might steal from a business, be it direct stealing or dodgy accounting. Customers too are a source, writing bad cheques, using stolen credit cards or returning goods falsely. Contractors may inflate prices or other third parties like hackers might compromise your information systems of data.
So how to prevent fraud? Well, maybe deter or minimise is a better word as it’s probably impossible to completely eliminate fraud. The most common fraud remedies are noted by Wasserman as follows;
1) Recruit the right people – do background checks if you can.
2) Have a rigid policy on accounting for all forms of cash coming into the business.
3) Keep an eye on all stocks, including goods returned.
4) Review contracts and purchasing arrangements regularly – this may prevent any “sweet deals” between employees and contractors.
5) Do regular spot checks on things throughout your business. Keep these unannounced.
6) Ensure your business has proper written procedures in terms of controls. These can be used as a reference point for new and existing staff.
7) Keep things like laptops and mobile phones secure, as these can often contain very sensitive data.
And last but not least, separating duties is probably one of the best tried and trusted ways to deter fraud. For example, it would be a bad idea to have the same person ordering goods and making payment for same. While not all these measures are workable in a small business, do have think about what you can do to deter fraud in your business. If you are lucky enough to have not experienced any fraud, well done, but stay in business without recognising the need for prevention and you might just find out you’re suddenly another victim.
Read Wasserman’s full piece here.