5 Ways to Prevent Fraud in Your Business

Fraud is something you never think will happen to you until it does. It can be ultimately life shattering and business-ruining if you’re not prepared.

No one wants to be a victim of fraud, especially if business is involved. Fraud can happen to just about any business that involves money and valuable data. Small businesses and corporate companies are all at risk. However, there are steps you can take to ensure your business is as covered as it can possibly be.

#1. Take Appropriate Security Measures for Clients

Make sure any clients you have are protected. This includes following the GDPR law if you’re in the UK, and protecting data with the correct measures. Keep clients updated every month or so to let them know what you are doing to tackle fraud.

More importantly, let them know what they can do to prevent it on their end. If your services provide some sort of online access, ensure clients use strong and relatively lengthy passwords. Maintain your site with high quality and effective security software.

Keep the use of mobile devices in mind also. These add another level of security threats. Your clients want to know they can access you from their phones without being at risk.

#2. Background Checks

These are important when hiring new employees. Put a formal hiring process in place for each person you take on board. You may especially want to look out for those with a background in payment management or cash handling.

You can find a variety of identity verification solutions at Hello Soda. They provide a useful way to verify identity of both employees and clients that you are choosing to work with. Through address and identity matching, they are able to reduce the chance of fraud. The system will spot the issues you didn’t catch.

#3. Manage Internal Duties

It is vital to put rules in place to make sure each sector of your business is protected from fraud. Make sure any access to financial data is restricted. Any other duties that are associated with payroll, finances and inventory should not only be limited, but also monitored correctly and regularly.

Make sure you have at least two people with roles that involve any kind of accounting or cash handling. Preferably this would also be done with professional accounting firms to make sure no acts of fraud go unnoticed.

#4. Keep a Close Eye on Bank Statements

It’s easy to slip into bad habits when reading bank statements. You may just keep an eye on the most recent balance, and scan over payments without giving them much thought. As long as nothing looks too suspicious…

However, make sure you look out for any sort of transaction that has been made to an unfamiliar account. This also includes any handing over of money to a third party. Fraudsters don’t necessarily take huge obvious chunks of money either. They are more likely to take small sums each time, because this is less noticeable.

#5. Inform Yourself, Inform Employees

Keep yourself and your employees well informed about fraud. Educate yourself on the ways in which it happens. Inform employees, especially those in sectors prone to fraud, how to spot any warning signs.

Implement reporting procedures for any suspicious behavior employees are aware of. Also, communicate what suspicious behavior they should look for. Try setting up a seminar on fraud for half a day or so – you will be amazed how much information about fraud protection your team will take away. Training also lets anyone with bad intentions know that you’re aware and clued up on potential security threats.

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