If you are a small business owner and have never experienced fraud, you are a minor fraction of all the small business owners in Australia.
According to research studies conducted by the Curtin Business School, every one out of eight Australian small businesses have experienced fraud and all of them spend over 100 hours annually dealing with the consequences.
The common culprits behind business fraud are managers who have gone bad or even low level employees. Many of these frauds are often to fund gambling ventures, espionage selling or even to pay for extravagant lifestyles.
Common types of frauds
First off, here are some of the common types of frauds faced by small business owners:
- Overpayment– This type of fraud involves making a false order with a phony credit card then demanding a refund.
- Fake Invoicing– You may be asked to pay for fake invoices for office supplies, advertising or web hosting fees—things you barely remember ordering.
- Spear Phishing– This involves attempting to steal confidential company data.
- Malware-Your business computers are tricked into installing software that steals data.
- Identity Theft– A scammer may steal your identity and conduct transactions or steal data.
- Employee Fraud– Employees may use business credit cards for personal use.
What you can do
Now that you know all the types of frauds you can face, here is what you can do to safeguard the integrity of your small business:
- Always segregate duties. Never allow a single manager to run all operations. Implement dual step verification for checks, online transactions and any other authorisation.
- Have control over how accounts are managed. Make sure all staff members are clear over rules and regulations.
- Regardless of your schedule, regularly reconcile business accounts. Carry out irregular audits of the financial process. Simply letting employees know you are checking everything can act as a powerful deterrent.
- Install renowned and reliable anti-virus systems on computers. Also consider limiting rights to access business computers.
- Never open or click emails from contacts that you don’t recognise.
- Install CCTV cameras and lock the premises before leaving. Depending on your office, you can also install physical barriers.
- Conduct rigorous checks on employees before hiring them. Double check present employees who rarely take a leave or seem to be living beyond their financial means.
- Enable employees to freely discuss their concerns without any fear. This will promote the idea of whistle blowing, in case they notice something odd.
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