Five Steps To Ward Off Business Fraud

Business fraud is everywhere. It can range from employees pilfering small items from the office to embezzling hundreds of thousands of dollars. And crimes may be committed by anyone from the lowest-paid clerk to a long-time officer. All too often, business owners are oblivious to wrongdoings, or they simply refuse to acknowledge the possibilities – until it’s too late.

Don’t make the same mistakes as countless other victims. Here are five practical suggestions for thwarting workplace fraud.

1. Keep your eyes wide open. View your operation like an outsider and identify the areas that appear ripe for fraud. If a security problem persists, don’t ignore it and simply hope it will vanish. Confront the toughest issues head-on.

2. Review and adjust internal controls. Accountants often pinpoint this area as a main culprit. Install a system of checks and balances and regularly monitor activities. Note that employees may be deterred from theft if the process is well-documented. Otherwise, they may think they won’t be caught.

3. Develop reporting and investigation procedures. Encourage your employees to come forth about suspicious activities, but keep matters confidential. When it’s warranted, respond promptly and decisively. You will also discourage fraud by showing that actions have consequences.

4. Don’t become complacent. Even if no fraud is detected after an initial sweep, you must remain vigilant. Continue to adhere to the procedures you’ve established. Also, make sure that you follow through on any unresolved issues to their completion.

5. Rely on your professional advisors. For instance, an attorney’s services may be required if you decide to seek legal damages, while an  accountant can help implement and update internal controls.

Of course, there are no guarantees, but these five proactive steps should, at the very least, minimize risks to your company.