Fraud isn’t often the first thing that comes to mind when launching a business. There are so many other things to think about, like branding, customer service, production, etc. But fraud is a very real threat for businesses of all sizes, with smaller businesses struggling to recover after a hit.
If your business has just become established, it’s unlikely you’ll have the time and resources to hire a full-time IT department, but there are still steps you can take to ensure you protect yourself against potential threats.
1. Check references
While we’re not suggesting any of your workers will jeopardize your business, it can happen. When employing new staff, always be sure to check their previous work history and any references from past employers. This is especially important if the new member of staff will be working with your finances or have access to the business credit card.
Fraud can occur in a wide number of ways, from counterfeit checks to malware. Where possible, it’s a good idea to ensure staff have access to training and are kept up to date. Hiring an expert to train staff is a great way to ensure that your whole team is on the lookout for potential threats.
When dealing with money, staff should be trained to identify fake or counterfeit cash and checks. It’s also worth rewarding those raising concerns to encourage others to do the same.
Businesses hold a lot of sensitive data about staff, trade secrets, and future plans. If someone managed to hack into the business network, they could get away with tax numbers, social security information, and much more. It’s integral for everyone’s safety that you ensure all personal and private data is safeguarded.
4. Review your insurance
Just like a car or home, insurance for your business is crucial. Insurance companies like Petruzelo Insurance have high coverage insurance options to make sure your business is fully protected in the event of fraud.
5. Share the power
Giving one member of staff too much power or access to a large amount of personal or financial data might seem convenient but could lead you to trouble. If one person knows they can do things like make payments and handle payroll while others can’t, they could easily commit fraud without anyone knowing. Financial tasks should be divided between a small group of people with an independent auditor available to spontaneously check accounts and processes.
6. Keep tabs on timesheets
One easy way to commit fraud is by lying about how many hours you’ve done. Keep track of timesheets, clocking in systems, or supposed overtime to make sure no member of staff is helping another. Employees could ask another member of staff to sign them in while they’re not in the office. To reduce the chances of this, use fingerprint identification or electronic fob systems so that all data is captured for each individual.
These six steps are just the first phase of preventing fraud in your company. As much as you would love to think the best of all your staff, you should always be on the lookout for any suspicious activity.