Fraud is a very real and scary prospect for small businesses. Money and cash flow is important, no matter how big the business. But, fraud will hit the smaller businesses harder. The loss of money through fraud can be financially crippling to a young business. It can also be emotionally damaging and draining if it happened through a close employee. Fraud can occur from both outside the business and within. It could be as simple as employees stealing stock or taking from the till. It could be hackers and spammers accessing your details through purchasing processes. It could be as large as employees syphoning client’s accounts. The key here is ‘detection’ and ‘prevention’.
Get to know your customers. When dealing with customers online, there is a small element of risk. Implement an identity verification system that scans the names and addresses of customers. It will highlight any fraudulent activity in the past. Occasionally spammers, robots and viruses will attempt to infiltrate your system. This could be through the purchase process or sign up forms. One simple deterrent is to use a Captcha (the series of numbers that determines whether a customer is human).
Get to know your employees. Within your business, you should always foster an open communication. Take the time to get to know your employees and learn to spot signs of difficulty. Very few employees maliciously intend to commit fraud. It is often the result of struggles at home or personal circumstances. Learn to notice any difference in behaviour and attend to it with support and care. Instil this throughout your management team.
Use segregated internal controls and record documents. Inside the company, fraud most often occurs during transactions. Every action should be segregated. Take a shop scenario, for example. The person who cashes up at the end of the day should not be responsible for recording the accounts. That way, any discrepancies can be pinpointed and located.
Foster a comfortable work environment. Quite simply, employees are less likely to commit fraud if they are happy in the workplace. When they respect their management team and are given freedom to work, they’ll behave as such. Those who love their job won’t risk a dismissal. WIth this in mind, be thorough during your hiring process. Monitor the general wellbeing and happiness of your workforce regularly. Keep an open dialogue so they can voice their concerns. Mutual respect is the key to preventing fraud in the workplace.
Bring in the experts. If in doubt, bring in professionals to audit your fraud prevention tactics. They can assess every detail of your business and point out any weak spots. They’ll help you tighten up processes and secure the loopholes. Just make sure this is done in a way that doesn’t show disrespect or mistrust in your employees. This could then have the opposite effect!
Fraud is a serious issue with devastating consequences. Unfortunately, the most common occurrences happen within the company. Your first step is to show respect for your employees. After that, simply keep your eyes open and put sensible procedures in place. Until next time, stay safe!