One of the biggest misconceptions in small business is thinking that you are too small to worry about fraud; thinking fraud really only happens to the big guys. Thinking this way is a large mistake – and a costly one too. In fact, financial fraud and identity theft are on the rise, and small business is particularly vulnerable. The following tips can help you protect your small business limit its exposure to fraud.
- Commit the resources – unfortunately, small businesses often overlook spending the money on fraud prevention measures, leaving them more vulnerable than their larger counterparts. Fraud can sometimes make or break a small business, so invest in prevention – it is well worth the money spent.
- Educate yourself – the best prevention is education. Be aware of the various fraud scams and ensure that you educate your employees as well.
- Establish anti-fraud policies – Identify which fraud schemes are most likely a threat to your organization, and then develop the prevention policy.
- Establish hiring practices – when hiring, ensure you check references and verify previous employment. Sadly, in many cases, fraud is conducted from inside.
- Conduct audits and inventory counts – frequent reviews of specific areas of your business that are more vulnerable to fraud are necessary.
- Review financial records – before passing any documents on to the bookkeeper, review for missing cheques, unknown payees or payments made out of sequence.
- Invest in IT security – anti-virus, firewall and spyware are advisable, and passwords should be strong and changed monthly.
- Keep diligent records – keep track of everyone you do business with and look-out for anything out of place in the billing.
- Hire resources – if you feel anti-fraud measures are too much for you to handle, consider hiring out help. Look for trusted associations; they will get the job done.
- Get insured – contact your insurance broker to ensure you are properly covered for fraud and all of your small business needs.
Protecting your business can be difficult and fraud is just one of the many exposures. Don’t let the bad guys win! For a comprehensive small business quote you are going to want to head to our small business insurance page. For more information on protecting yourself from Fraud, head to the Canadian Anti-Fraud Centre.