Protecting your business against fraud – Five key steps
Fraud costs the UK’s private sector £45.5 billion each year, with small to medium sized businesses suffering losses of some £19 billion on an annual basis.
With the above figures revealing that fraud can put a substantial dent in a businesses’ profits, below are just some of the measures that firms can take to detect and prevent fraud.
Working to create and implement a number of internal control systems will help to ensure that businesses are able to effectively defend their assets. These controls can take a number of forms, including some or all of the following: accounting comparisons, authorisation and approval, physical controls and counts, arithmetical checks and segregating duties.
Ensuring that no one person has single control of any business area, may remove the temptation for foul play. As well as putting this into place for areas such as accounting, this can also extend to other key areas including ordering goods, despatch and stock control.
While the prospect of monitoring employees’ behaviour is something that few employers relish, taking note of any changes in the way employees carry out their role – such as being overly protective of their work – can help to pre-empt instances of fraud. This is also the case for any employees who may harbour any ill feelings to their employer as a result of business restructuring.
Comparing monthly management accounts and budgets against actual results will enable businesses to identify any variance, and take immediate action where needed to stop any potential fraud in its tracks.
Establishing and communicating a clear policy on fraud will ensure that all members of your business understand that any fraudulent action within your organisation will not be tolerated.
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