How to Address Fraud in Your Business

Whether you’re concerned about external or internal fraud, there are only a few things you can do as a business owner to prevent and control it. But it isn’t as dire as it may sound. While fraud is a complex issue, simple fixes are something financial professionals can help you with. They can also be there to help you in the aftermath in case something does occur.

Preventing Fraud

So how can you help prevent fraud in your small business? Here are some starting points:

  • Utilize employee screening. While background checks, drug screenings, and references don’t cover all potential cases, they can mitigate the risk of fraud. Some companies also rely on credit checks, but the results may not be indicative of an individual’s propensity to commit fraud. However, employee screening can help you make hiring decisions that may reduce the risk of hiring someone who does not have the best of intentions.
  • Develop a code of conduct. You probably have an employee handbook, but does it lay out the employee code of conduct? This is a series of requirements for day-to-day interactions that will have consequences if breached. For instance, a code of conduct may spell out your company’s dedication to eliminating abusive behavior in the office. You can include items that relate to fraud. Have all employees sign this code of conduct when they begin work or every time you make changes.
  • Watch for changes in behavior. Is a good employee suddenly struggling? Are you noticing changes in the way the person interacts with other team members or managers? Sudden changes in behavior can indicate that there are problems with employees. While jumping to the conclusion that they are willing to commit fraud may be excessive, it is worth keeping your eye on those employees or even having a discussion before it becomes an issue.
  • Establish checks and balances. When there are bigger risks for fraud in certain departments, create a way that ensures no single employee has sole responsibility. For example, your bookkeeper shouldn’t be in charge of all aspects of accounting; there should be others who are able to check the math and ensure that everything is correct.
  • Create technical protections. Internet security and fraud protection are big business, and for good reason. Why spend all your time and resources creating systems that you’re not trained to develop or maintain? Work with a professional to better determine how to use technology to increase the safety of your data and money.

Do you have questions or concerns about fraud at your company? Contact us today to learn how to protect your business.

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