How To Protect Your Small Business From Fraud

how to protect small business from fraud

Unbeknownst to most, small enterprises are often more likely to be a victim of fraud than consumers. 

Fraud can have severe consequences for a company. They can lose money, assets, customers, and their reputation. 

For a rundown of the prime perpetrators responsible for fraudulent activities in business, see below; 


Corrupt employees may steal assets, commit fraudulent accounting, or claim workers' compensation illegally. 

With access to so many different of the business. Coupled with their inside knowledge of how the company works, it's often easy for employees to take advantage in their workplace. 


From using stolen credit cards to signing bad checks or returning an item to the wrong company. There are numerous ways consumers commit fraud against businesses. 


some vendors will attempt to scam businesses by billing for work that was not completed. Furthermore, some overcharge, or for example, will send an order short of the set number of items purchased. 

Fraudulent activity affects a business's livelihood. As such, company owners need to be vigilant and invest in security solutions and practices that will keep their assets, premises, and documents safe. 

For advice on what solutions to incorporate, take a look at the below suggestions. And select those that suit the nature and scale of your business. 

Secure Company Checks 

Take preventative measures to stop check fraud by adding security characteristics to business checks. 

For example, Intuit Quickbooks gives customers access to unique checks with secure features, including watermarks, a tamper-resistant toner area, and security coating on chemically reactive paper. 

Anonymous Tipping 

Create an anonymous way for staff to report workplace practices or employees they believe to be committing fraud in the workplace. 

Assign a trusted member of the team to investigate all tips. In doing so, a company could stop fraudulent activities early. 

Spontaneous Audits 

Internal scheduled audits are expected in every business to monitor department processes. But they also give room for employees to fix or hide fraudulent activity ahead of a scheduled audit date. 

So instead, create surprise audits to increase your chances of finding fraudulent activity. Furthermore, this is likely to deter employees from committing fraud in fear they will be caught during a random audit. 

Customer Returns Policy 

Eliminate the risk of fraud by creating a written returns policy for consumers that includes; 

● A product can only be returned to the shop where it was purchased 
● Customers must have a receipt illustrating proof of purchase 
● No cash refunds for card or check transactions permitted 

Restricted Access 

Every department in the work premises and folder on the companies intranet needn't be open to every employee. 

Restrict access by assigning security guards or ID pass check-in stations to permit entry into and around the building to authorized personnel only. 

Equally, add two-factor authentication to computer files that only need to be accessed by specific employees. 

Cross Shred Documents 

Any documents that need disposing of which have the following details on should be cross shredded to prevent opportunists from using the data for fraud: 

● The company, clients, and suppliers address and contact details 
● Company financials, plans, and other confidential information 
● HR files, including staff CVs, bank details, address, IDs, pension plans, salaries, and so forth 
● Company receipts and expired business cards 

A cross shredder is one of the most effective shredding solutions for confidential documents. 

Background Checks 

Prevent fraud in the workplace by making background checks a mandatory precondition before hiring. 

You can assess a persons' character and history by asking for proof of education, employer references, and contact details. Moreover, if the employee will be dealing with cash, request a credit check. 

Final Thoughts On Fraud Prevention

Startups and small business owners are often so wrapped up in getting their business off the ground; they forget to protect it along the way from potential threats. From fraud to natural disasters, accidents in the workplace, to cybercrime and theft. Reviewing and implementing plans for the "what if's" in business will ensure your company can prevent and survive everyday occurrences such as fraud.

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