Financial Fraud and How to Protect Yourself

Incidences of financial fraud are rising. And as a result, businesses lose a large amount every year. The main losers are small businesses. Accounting services can help protect your business from financial losses.

How to Protect From Financial Frauds

The main reasons for financial fraud in small businesses are inadequate financial controls, screening of employees, identity theft, cyber attack, and complacency. Here are a few measures that you must incorporate into your business practices to avoid losses.

Guard Against Cyber Attacks

Installing robust firewall and antivirus software can help detect breaches and protect your business' sensitive financial data. Understand your business needs and buy software from reliable cyber-security vendors. You also need,

• Clear instructions to create strong passwords
• Change passwords every 2 - 3 months
• Backup your files regularly to manage downtime

Open a Corporate Bank Account

A corporate bank account will help separate your personal and business expenses. An accountant can install an accounting setup, internal controls, procedures, and processes for your business.

• Know how your bank secures online transactions
• Features like automatic logout protect your account
• Ensure that credit providers have adequate fraud protection
• If employees use credit cards, auto alerts for high-value transactions
• Prefer online transactions to minimise paperwork and chances of fraud

Data-Driven Decisions

Many small businesses skip this step. Background checks help you filter qualified candidates before hiring them. References and work histories are useful. However, take them with a pinch of salt.

• Outsource the employee screening to a reliable company
• It is an extra burden, but it helps minimise future fraud
• Take appropriate consent or permission for the screening
• Keep it limited to finalists to keep the costs down

Install a Secure Entry System

A reliable, secure entry system can prevent undesirable individuals from entering your premises. It also enables you to govern employee access to sensitive areas.

Invest in a key-card system that:

• Maintains time-stamped records of entries and exits of each of your employee
• Allows certain employees with the right key card to access sensitive areas

Insure Your Business Against Fraud

Financial fraud can make you lose. You cannot prevent ID theft. However, you must protect your business against the losses it can cause in a worst-case scenario. Insure your business from such a happening.

• Investigate and take out adequate insurance protection
• In the case of fraud, inform the insurance company
• They will reimburse you for the losses
• It limits your financial damage
• It ensures early recovery to normal

An experienced accounting services provider can advise you on protecting your small business from financial fraud. Before hiring one, review your business requirements and the type of protection you need.