Tips to protect your business against financial fraud

A positive attitude is one of your best assets if you run a business. But it’s worse than useless if not balanced with sharp critical faculties. Things can and will go wrong. As your business grows, so does the chance that you will be a victim of financial fraud.

Theft and fraudulent activity is prevalent both on and offline, so here’s how to sharpen up and safeguard your company.

1. Keep a close eye on your accounts

If you don’t know your company’s figures, how will you know if you’re a victim of financial fraud? The sad fact is that criminals are clever. They can steal great sums of money over a long period of time without it making a big difference to daily operations – so how can you stop this from happening?

Well, one of the best ways is to keep a close eye on your accounts, perhaps by investing in a software solution with hosting that will allow you to monitor the financial aspects of your business anywhere, anytime and on any platform. Smart technology also allows for automatic data backups and behind-the-scenes maintenance, enabling you to see the latest information at a glance.

2. Be aware that there’s a problem

When it comes to financial fraud, you may envisage a scammer sat behind a computer hacking into company data or bank accounts. While this certainly goes on, employee theft and deceit is also a real concern that is costing US businesses $50 billion annually. That’s right, there are many fraudulent and embezzlement schemes doing the rounds these days including: funds theft, check fraud, vendor fraud, credit card fraud, payroll fraud and loan fraud.

A new study by Hiscox – a global specialist insurer – found that US businesses affected by employee theft lost an average of $1.13 million in 2016. Interestingly, small and midsize businesses were hit disproportionately, representing 68 per cent of the cases. Their median loss last year was $289,864.

3. Implement a strict screening process

While criminals don’t have a sign on their forehead, you can reduce the risk of them infiltrating your company by screening all potential employees. This means running background checks and following up on references from past employers. What’s more, even if you trust your team implicitly, don’t let one person have end-to-end control of financial records and funds. Doug Karp, crime and fidelity product head at Hiscox, said of staff managing finances: “If they are an authorized signatory on a check, don’t let them print a check out on the system.”

Sure, it’s sad that we have to be so vigilant these days, but it’s always a good idea to remove temptation so that even the most honest workers aren’t given a moral dilemma if they find themselves in a situation where taking money becomes relatively easy.

4. Protect computer systems and practice web awareness

If you’re trying to get off the ground with little to no money, protecting your computer systems may be the last of your worries. That said, it’s well worth investing in the latest firewalls and anti-virus software as hackers can be extremely detrimental to your company. What’s more, you must practice web awareness and be aware of ‘phishing’ scams that try to obtain confidential information from you and your employees. These usually take the form of a fraudulent email sent from what seems like a completely legit financial organisation. As a rule, never open any unfamiliar documents or emails.

Protecting your business against financial fraud should be on the top of list for all companies, with technology, intelligent software and plenty of regular financial checks helping to keep your company safe.

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