Top ways to protect your small business against internal fraud
As technology advances, entrepreneurs and customers of small businesses are continuously faced with the possibilities of internal fraud. Internal fraud is entirely common but it can be altogether prevented.
Most internal fraud incidents are engineered by employees, and such cases take up over half of all reported incidents. As for actual losses, about $652 billion was lost at the hands of internal fraud. Almost 80% of all companies that suffered from such cases were small companies. Small companies should pay special attention to cases like asset misappropriation, corruption and doctoring financial statements. Here are some measures small companies can take to prevent internal fraud:
- Be sure to establish company policies that enable employees to report potential dangerous behavior of other employees.
- Check employees background before giving them sensitive work, and let them know about the censorship; making employees work separately may also help with keeping information confidential
- Company owners should constantly focus on every aspect of their businesses to keep an eye on potential risk. For instance, control your bank account; censure checks before signing them; don’t use a signature stamp; ask an outsider to read your books regularly without informing your employees