Fraud Prevention: The Importance of Security and Fraud Prevention for Businesses
Looking for information on security and fraud prevention for your business? Then look no further!
One of the greatest concerns of many business owners is how to protect their company from fraudulent activity. It’s all well and good focusing on expansion and profits, however, neglecting your security and fraud prevention methods could set you back millions!
Whether it be from customers, third-party organisations, or even members of staff, there are many directions that fraud can originate from meaning you need to be very careful of who you trust. To save you from the potential of future stress, paperwork and financial loss, it is crucial for all businesses, big or small, to invest time and money into fraud prevention.
Luckily we are here to give you some advice on the importance of security and fraud prevention and let you in on some top tips on how to prevent being scammed.
What Is Business Fraud?
Otherwise known as corporate fraud, business fraud consists of illegal and dishonest activities partaken by businesses or individuals with the intent of gaining a financial outcome for themselves.
What Types of Fraud Are There?
Within corporate fraud, there are many types of fraud, which include the following:
- Identity Fraud: Fraudster’s stealing your identity to access your finances.
- Payroll Fraud: Employees lying about how many hours they have worked when filling in time sheets, or asking for pay advances and not paying them back.
- Asset Misappropriation: Filling out false invoices, false expense claims, payroll fraud, stealing non-cash assets of a company.
- Financial Statement Fraud: Misstating financial information on a company’s financial reports. Including businesses making their financial position seem more appealing to investors, or for department managers to appear more successful to achieve a potential bonus.
- Corruption: This includes accepting or giving bribes, aiding others in committing fraud, or favouritism and nepotism.
How Can I Prevent These Types of Fraud?
Invest in Fraud Prevention Software
The most thorough and straightforward way of fraud prevention is to install a fraud prevention software.
AccessPay, for example, can offer an online payment tool which automatically detects any fraudulent activity and can immediately remove it from your transactions.
They use a traffic light system which alerts you to the transactions which pose the biggest risk. These can then be reviewed by you and either removed or submitted for payment.
Accesspay also allow you to choose which staff members can submit and approve payments by letting you create business profiles for selected staff.
Know your employees
Sadly, it’s often the employee you least expect who commits fraud. Isn’t that always the way? The quiet ones! This is one of the reasons as to why you should have good working relationships with your employees. Two benefits of this are that it will make employees feel appreciated by you thus less likely to want to commit fraud.
In addition, by talking to your employers regularly you will be able to identify any changes in their behaviour, which allows you to detect the warning signs early on.
Lay down the Law Early on
Making employees aware that you take fraud very seriously and already have top-quality fraud prevention measures in place will likely nip any fraud attempts in the bud. You should also ensure that you let employees know of the consequences of fraud.
By informing all employers of the signs of fraud will also give honest employers the information they need to help you detect signs of fraud. Chances are, they are more likely to detect dishonest behaviour or even be disclosed this by the person committing fraud, which they will hopefully report immediately to you.
Know Your Customers and Suppliers
Purchase from sellers you know are reputable. You can always email the seller to make sure they have an active email account and ensure they don’t use free email services where bank details weren’t needed to open the account. You can also look out for sellers with a trademark or patent for further reassurance.
Know who your customers and target market usually are. Check to see if they have bought from you before or do online searches for further reassurance.
Be on Top of Finances
Make sure you always know what is going on with your finances. Always check bank statements and financial reports and know exactly who has access to your accounts. Remember, software such as Access Pay can help you restrict who has access to this and who has the authority to make payments.
Why Is It so Important to Prevent Fraud?
Now you know how you can help to prevent fraud, we also need to stress again why these measures are so important.
The most obvious reason is to prevent the loss of money in your company. Investing in security and fraud prevention although costly, can save you money in the long run. It will also prevent a lot of potential future paperwork and the time wasted to resolve fraudulent activity.
However, an equally as important reason is to make sure your company is trusted. By being able to avoid fraud, it is guaranteed that your business will be deemed credible by sellers, buyers and customers. Fraud can easily ruin your reputation with any of your customers!
Lastly, in a company with a proper fraud prevention strategy, you can help your employees want to be more honest, and any new staff will be able to know right from the start that any dishonest behaviour will not be tolerated by you or their colleagues.
So there you have it! All the reasons why fraud prevention is so important!
This post was written in collaboration with AccessPay, an online banking tool which focuses on removing fraudulent activity. For more information on their software, visit www.accesspay.com or call 0203 8114074.