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How to Prevent Fraud in Your Business

Business fraud can be costly, with US businesses losing an average of $300,000 per year in invoice fraud alone. Any business, large or small, can be impacted by fraud, but yours doesn’t have to be one of them.

With the help of efficient business fraud solicitors and proper fraud prevention measures in place, businesses can significantly reduce their risk of falling victim to fraud.  Solicitors help businesses identify fraudulent activities, implement internal controls, and provide legal guidance to protect assets and maintain financial stability by investing in fraud prevention strategies. You might be able to prevent this costly crime by taking some of the following actions:

Ask Experts for Help

Don’t wait until you’re a victim before you take action against fraud. Many businesses fail to identify fraud or are late to do so because they’re unsure what they’re looking for. They might not even know they’re a victim until they’ve lost a significant sum of money they can’t get back.

Rely on experts for help, and that might not happen. For example, nationwide surveillance teams like Diligence International Group can be relied on to seek out potential fraud, while a number of training businesses can help you put measures in place to prevent it in the first place.

Know Your Employees

Some employers see their employees as nothing more than a number, which can have disastrous consequences. The more you get to know your employees, the better your chances of identifying those at a higher risk of committing fraud within your business.

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While getting to know your employees can begin with a background check, that’s only the first step. Communicate with your team so you can learn more about their job satisfaction, happiness, and even their home lives. Studies also show that employees with the most power, who can be described as utilitarian and greedy, hold the greatest fraud risk.

Establish Internal Controls

You can’t watch your employees 24/7, so don’t be afraid to explore internal controls that would make it harder for employees to commit fraud and easier for you to identify it when they do. For example, you might look at divvying out financial-related tasks to multiple employees rather than leaving one person in charge. If you notice any discrepancies, you can identify who they involve.

You might also make a point of querying any new vendor you’ve never seen before since fictitious vendors are a common type of fraud for taking money from businesses.

Create a Reporting System

Some employees can become aware of potential fraud within a business but aren’t sure how to approach their management team about it. They might know something’s amiss, but they’re unsure what channels to use to bring the situation to light and might even be afraid they’ll be dismissed. Some employees might not even feel like their management team communicates effectively enough for them to be taken seriously.

Create a reporting system, and you might be tipped off to potential cases of fraud before they seriously impact your business. Ensure you offer an opportunity for employees to report possible fraud anonymously so they feel comfortable bringing the issue to your attention. For many employers, creating an anonymous reporting system can be as easy as including a form on your company intranet and ensuring all employees know it’s there.

No business owner can ever prevent all cases of fraud, but that doesn’t mean you can’t improve your chances. You might be able to prevent or identify fraud in the workplace and save a significant sum of money by taking some of these important actions above.

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.