5 Tips to Help Your Business Avoid Falling Victim to Fraud
When most people hear about fraud, they tend to think about fraud against the average person, like identity theft or wire fraud. Fraud against a business may not enter into their minds. As a business owner, you know better. Your business deals with a range of employees, customers, and vendors on a daily basis, leaving you with more opportunities to be defrauded.
How can you protect your business against fraud? Consider the following tips and tricks.
1) Check Your Employees
If you haven’t thoroughly vetted your employees, you may be susceptible to employee and insider fraud. These types of fraud can happen when employees embezzle assets, skim cash, write fake checks to themselves, or steal supplies from your business. You can prevent these fraud losses by controlling your own financial responsibilities and keeping employees’ financial duties separate, ensuring that no one person has access to all of your company’s finances. It’s also essential to perform background checks on prospective employees, especially when they have financial duties.
2) Fortify Your Contracts
Many of your business relationships involve contracts, but are they solid contracts? Contractor or vendor fraud can occur when your company’s independent contractors, subcontractors, and other vendors skimp on the goods or services they deliver, when they over-charge, or when they bill for work they never performed. You can prevent this by researching vendors beforehand and making sure your contracts are ironclad, which is best done with the help of a lawyer. You should also review invoices and purchase orders to make sure they’re legitimate and that you’re getting everything you ordered.
3) Maintain Sound Policies
When you set up great policies and stick to them, you’ll be better equipped to keep track of your company’s assets and finances. For instance, customers and buyers can defraud your business by writing bad checks, using counterfeit money or stolen credit cards, shoplifting, and even by trying to refund items they never purchased. Your employees should be trained in spotting these practices. You should also have policies on dealing with fraud, as well as inventory control policies to keep track of your supplies.
4) Keep An Eye Out for Scams
Every once in a while you may be confronted with an outright scam, and you’ll need to know how to tell them apart from honest offers. Scams can often come in the form of robocalls (or recorded telephone sales pitches), free trial offers, and companies that insist on being paid by wiring money or in the form of reloadable cards (like MoneyPak or Vanilla). When you’re faced with an offer that requires upfront payment or a rushed decision, it’s best to maintain a healthy level of skepticism. Do your research first and don’t be pressured into anything.
5) Secure Your Tech
Just as technology can be used to defraud your business, it can be used to protect it. You just need to know the right methods. Make sure your computers are protected with firewalls and antivirus, malware, and spyware detection software. You may also want to implement a password policy to have your employees change their passwords every few months. Finally, it’s important to keep up data policies and ensure your company’s sensitive data is always backed up.
If you’re concerned about fraud within your business, Campbell Law Group can help. Our skilled attorneys practice business and corporate law to keep your transactions secure, your contracts rock-solid, and your business protected. Call us to discuss your needs with a legal professional.