November 17th kicked off Internal Fraud Awareness Week, a global effort which seeks to reduce fraud by promoting anti-fraud awareness practices. The campaign began as an initiative to encourage business leaders and employees to reduce fraud through education and anti-fraud awareness.
Being aware of fraud scams is important because unfortunately, fraud isn’t going anywhere.
Small businesses, in fact, are frequently targeted by fraud. According to the Association of Certified Fraud Examiners (ACFE), businesses with less than 100 employees experience a median loss of $154,000. Surprisingly, this number is higher for smaller businesses than larger companies. Smaller businesses often lack the resources to implement internal checks and balances for their accounting systems, which makes them more susceptible to fraudsters.
Knowledge and awareness are key to the early prevention of fraud. Here are some simple measures you can take to protect yourself and your small business.
This may seem tedious, but with so many transactions taking place online these days, it’s necessary.
Most businesses conduct their work online, with employees having access to various avenues of technology. Implementing strong, unguessable passwords and locking all company devices is essential. Passwords that require you to change them every 60 days is best practice. Don’t duplicate passwords by using the same one for multiple accounts. This leaves you vulnerable if one of your accounts gets hacked.
Business owners often forget that fellow employees are a large point of vulnerability. Payroll schemes occur twice as frequently in small businesses as opposed to larger companies.
However, with the proper training, employees can be an excellent line of defense. All employees should receive consistent training and regularly training about security updates.
Workers’ compensation fraud is another form of small business fraud you may come across as an owner. Worker’s compensation is the business’s defense if a worker gets injured on the job by compensating the worker for their injury. There are a variety of ways this type of fraud can be committed, so remaining vigilant and aware is key. Employees may get injured outside of work and claim this happened on the job, or they could feign an injury. Maintain up-to-date, accurate records, thorough documentation of on-the-job incidents, and watch out for signs of fake injuries.
Limit the amount of access you give to employees regarding banking information by granting a select few with access to those accounts. It’s important to trust your employees, but it’s not necessary to give every employee access to banking information.
Implement Surprise Audits
Surprise audits provide another shield against fraud by ensuring that all expenses are legitimate.
The Association of Certified Fraud Examiners offers an anti-fraud protection check-up, which is an easy and effective way to test your company’s fraud health. If you’re unsure of where to start for an audit, this a great tool to see which areas need to be improved upon and corrected.
Ensure you know your monthly numbers regularly as well. Reviewing financial statements on a regular basis (on a monthly basis, if time permits) will send off alarm bells if the numbers go awry.
Invest in High-Quality Anti-Virus Protection
It may cost more, but it’s worth it. Invest in a high-quality anti-virus and firewall for your computational system, as well as spyware and malware protection. You should also make sure these are updated on a regular basis.
Don’t Overshare on Social Media
Social media can be a great tool for keeping in contact with old friends and acquaintances but be careful what you share on there. Sharing too much information, such as compromising company or client information (sometimes without even realizing it) could have negative ramifications.
Shredding your documents on a regular basis is crucial. Shredding confidential documents that have account numbers, credit card information, addresses or any other sensitive data will help protect your business from fraud or identity theft.
If you’re worried that it may be easy to forget to bring your documents in, on-site shredding services saves you from transporting all your documents. It’s ideal if you’re looking for quick, convenient service.
At SafeShred, we offer paper shredding services to hundreds of businesses throughout the greater Los Angeles area. From small, local businesses to industry giants, we are fully trained and NAID, FACTA and HIPAA compliant. Contact us today or give us a call at 1-800-987-4733. Our quotes are always free!