The Best Way to Protect Your Small Business from Fraud – Small businesses are more vulnerable to fraud because few business owners take the time to review every line item on their bill or choose to mix business and personal accounts. Credit card fraud is one of the most common types of fraud. Each year, fraud costs businesses with fewer than 100 employees about $155,000.
To ensure that any potential losses are avoided, fraud management necessitates a variety of measures. These methods include keeping track of the company’s financial transactions, evaluating the security standards of all business partners, identifying weak areas in the business model, and keeping up with business fraud trends.
Here are some pointers to help you learn how to avoid fraud having a negative impact on your company.
1. Maintain Accurate Recordkeeping
The Best Way to Protect Your Small Business from Fraud – All records must be managed and stored correctly to ensure that the transactions are valid and error-free. The first step is to thoroughly review any documents you receive or send through email, fax, or mail for any personal or commercial information. How you maintain your documents determines the safety and security of your small business.
Make certain that you and your business partners do not post any sensitive information online unless you are confident that the server is secure. Fraudsters can easily steal other personal information if a phone number or mailing address is stolen. This could lead to them obtaining financial information about your business as well.
2. Acquire Professional Assistance
The Best Way to Protect Your Small Business from Fraud – Fraud management software can assist small businesses in identifying and mitigating risks. These systems can be provided by a fraud management company such as Envestnet | Yodlee to ensure that small businesses have the resources they need to assess their current performance.
An example of a useful fraud management system would be bank account number validation. Before you transact with users, ensure that their account information is correct and that their accounts are set up to accept payments. The bank account number validation service from Envestnet | Yodlee covers all deposit accounts and includes multiple verification options such as instant account and challenge deposit. You can fight fraud and manage risk for each transaction.
3. Educate Your Staff
The Best Way to Protect Your Small Business from Fraud – When it comes to fraud, your employees are likely your most vulnerable point, but they are also your first line of defense. It’s a good idea to provide regular training for both new hires and seasoned employees on basic security threats and preventative measures. To ensure that the training is followed, implement policies that instruct staff on how to properly use and handle firm confidential information, such as financial data, personnel, and customer information.
Internal fraud is far more damaging than external fraud, so hiring the right people is critical, as is having effective fraud management tactics and rules.
4. Implement And Update Security Systems
If your company accepts payments online, consider getting an identity theft protection system. Some companies offer this as part of a package, so you won’t be charged anything extra. This means that the personal details and other important documents are encrypted and, therefore, much harder for hackers to obtain. This will significantly reduce the risk of your small business being targeted by fraudsters.
5. Seek Professional Support
Fraud management solutions can be used by small businesses to aid in identifying and mitigating risks. These systems are offered by a fraud management company to ensure that small businesses are equipped with the right tools to evaluate their current status and performance.
Fraud in any field can be extremely damaging to your company’s health. This is particularly true of small businesses. When compared to larger corporations, small businesses face unique risks. You can, however, help to prevent theft and fraud by taking the above-mentioned precautions. Keep accurate records, employ professional fraud management systems, and educate your employees.
Ingrid Maldine is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Ingrid’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Ingrid has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Ingrid has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.
