Do Your Due Diligence Against Fraud

Written by Roberta M. Fisher, Gadd Business Consultants 

Almost every business encounters fraud at some point and time (either seasonal or ongoing) regardless if it is a large corporation with thousands of employees or a small business with a few employees.  Fraud in a small businesses is more prevalent than in large corporations due to the lack of back ground checks, division of duties and lack of internal audits.

Fraud can happen in all facets of your business from your accounting to shipping and delivery departments (wherever insufficient monitoring is done).  In order to defray your loss of income, supplies and products an owner must keep ahead of the thieves.  Don’t set up an atmosphere where theft is an easy and manageable thing to do, this can provide a opportunity for good people to be tempted.

There are several things even a small business owner can put into place to minimize the amount of thefts.   Checks and balances can be as simple as dividing duties to installing cameras though out the store.  Listed below are some of the ways to fight off fraud in your business.

  1. Perform background checks (criminal and financial) on anyone that handles money or that can affect money transactions.
  2. Training of staff on what to look for to prevent fraud.
  3. Division of duties when it comes to who is authorized to make deposits, write checks and the person who reconciles the bank account(s).
  4. Dedicated computer for bookkeeping activities that does not access the internet and social media sites.
  5. Approval of two employees for large purchases or movement of monies.
  6. Validate time sheets to stop misreporting of hours worked.

If an employee is caught stealing or of fraudulent reporting you should report them to the authorities in order to stop the cycle from continuing after they have left your place of business.

References: Jerome Osteryoung, TLH blogger; “Be diligent to root out growing problem of fraud”