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Business Fraud and How to Minimize Your Risk

Business Fraud and How to Minimize Your Risk

Businesses can be ruined by fraud and small businesses are usually the target of most scams because they don’t have the processes in place to see when they are happening.  In this blog post, we will take a look at some of the ways in which you can fight fraud within your business.

Know Your Business

Firstly, to secure your business and protect it from fraud you are going to need to learn it from the inside out. As a business owner, the good news is you more than likely know how your business operates but it’s good to look at the small details.

Do you know how often you pay for your goods or services? Do you know how much they cost? Do you know the names of the people who invoice you? Chances are these are questions you may not know the answers to, but if you take the time to find the answers you will be in a better position if someone does try to scam or commit fraud against you.

Use AI

Manually checking invoices, employee mileage, fuel costs, employee absenteeism, and everything else within a business is going to take up too much of your time and if you try to do it manually, you will often glance over details which could highlight fraud early on.

Instead of having to manually check all of that information, you can use artificial intelligence and machine learning to detect patterns and anomalies. AI can detect patterns of sickness, overuse of fuel and company vehicles, and an increase in spending from your expenses.

AI may be an expensive option, but if you are too busy to examine these stats, it could save you a lot of money.

Hire Help

If you suspect fraud is happening within your company you may want to hire outside help. There are a few options a business owner can take. A security firm that provides security guards may put some people off from committing fraud, while in more complex situations you may want to hire a private investigator.

As a business owner, you may be running these costs up in your head and thinking you can’t afford to hire anyone else but the reality is you could already be losing money which would pay for the extra help when the fraudulent employee is caught. The cost of hiring a private investigator or a security firm also isn’t as much as you would think and, in the long run, could save your business money.

Install Physical Security

If you can’t afford a private investigator or a security firm to secure your company’s products and services, the next best thing is to install physical security such as CCTV cameras and locks.

Installing a CCTV system is a great way of cutting down on your insurance as well as making your staff feel safer while at work.  If items are going missing you don’t want to accuse the wrong member of staff as it will lower morale and ultimately you will need to replace that staff member in the future because they won’t feel appreciated.

When installing CCTV, it’s important to get the best system you can afford. Try to get good quality cameras that work day and night. You may also want to consider installing good lighting with your cameras as the more visible your staff are on camera the more likely you are going to be to catch the culprit in action.

Protect Yourself against Cyber Attacks

Fraud can happen in many circumstances and cyber attacks are one of the leading methods for attacks on small businesses. Cyber attacks can end a business too, with the majority of businesses who suffer a cyber attack going out of business within six months.

Protecting yourself against cyber attacks is difficult because cyber criminals change and adapt all of the time. Our advice would be to use common sense when browsing online and don’t click on any links you receive in an email unless you trust the source; even then you should be cautious.

Installing a virus scanner, a malware scanner, and a firewall should be one of your first priorities if your business is connected to the internet. You don’t have to pay for these and there are many free versions of software that will protect your business against online threats.

Conclusion

Protecting your business against fraud is difficult, but using the tips above should give you a better handle on a situation if it were to arise. Some of the tips could seem costly but in the long run, could be the difference between going out of business and building a successful and pro


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by Rebecca Jones // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.