You pride yourself on running a fair, reputable business. Unfortunately, other people aren’t always as honest. Fraud is a common problem which can strike any business regardless of industry or size. Even worse, the median loss from fraud is a whopping $145,000, which your business might not be able to survive.
Fortunately, a few simple techniques can help keep your business safe from fraud:
1. Train and Empower Your Employees
Your staff is the first line of defense against fraud. Train them to spot scams such as counterfeit money, stolen credit cards and more. Also, encourage them to notify a supervisor if they suspect fraud, even if they’re not 100% sure what’s going on. Employees should be allowed to trust their gut if a transaction feels off in some way.
2. Perform Background Checks and Monitor Employees (Reasonably)
Perform background checks on every new employee. The upfront costs of the checks are usually a good value when you’re able to find employees you can trust.
Additionally, add cameras to transaction areas such as by the safe and above the cash register. Let employees know they’re being monitored. Cameras, and just the idea of being watched, significantly reduces employee theft.
3. Separate Financial Responsibilities
Never allow a single employee access to all of the company’s financial information. If the entire accounting operation is controlled by one individual, fraud can difficult – if not downright impossible – to detect.
If your business is just starting out, you’ll need to verify all financial information personally. As your business grows, you can hire a third-party accountant to help. When your business is large enough for you to take a more hands-off approach to the finances, create a system where at least two employees have the same financial access as one another.
4. Implement Financial Safe Practices
A few simple practices will help keep your financial records safe. Avoid leaving checks, statements and other financial documents out in plain view.
For ideal online safety, keep a separate computer in a secure area used exclusively for online banking. A single computer limits potential hacking opportunities such as the installation of malware or keyloggers.
5. Work with Your Bank
Speaking of online banking, your banking institution is a valuable partner in keeping you safe from fraud. Check with your bank to learn what services they offer. Positive pay services, dual controls and other safeguards help prevent unauthorized account access.
6. Insure Your Business Against Fraud
Part of the insurance package for your business should include coverage for cyber and check fraud. The amount of coverage required should equal the regular balance of your company accounts. Consult with your insurer for details.
7. Don’t be Embarrassed
Victims of fraud often feel caught up in a confusing whirlwind. But don’t let embarrassment keep you from seeking help if you’ve been a victim of fraud.
Contact your bank’s fraud department first. They’ll help you navigate the entire situation. You’ll likely also contact the police and your insurance company. Always be upfront and honest when sharing information about what happened.
8. Access a Fast Cash Advance When Needed
If you’re the victim of fraud, help is available. Insurance might help cover the losses, while law enforcement can track down the responsible parties. However, recovery can take time.
The stolen money can leave a hole in your cash flow. Consider a merchant cash advance, where over $5,000 can be added to your account just a few days after application. A quick infusion of working capital can help your business stay on its feet while you deal with the aftermath of fraud. Plus, repayment for a merchant cash advance is flexible – after all, you’ve already got enough to deal with.
Fraud is more sophisticated and complicated than ever before. Fortunately, effective fraud prevention techniques are often simple and straight-forward to implement.