Are You the Next Fraud Victim?

Did you know that 64 percent of all small businesses lose money due to employee theft? And that an average business in the U.S. can lose up to 5% of its revenue to fraud in all its forms?

shutterstock_101312788When you consider how many small businesses are struggling to survive, you realize that losses like this can be devastating to bottom lines.

Here are some actionable ways to stop your small business from being a victim to fraud….

Digitize Your Documents

People realize by now that a 100% paperless office is a fantasy.

But you can make great strides in digitizing your documents. Doing so will help to prevent theft of employee records, tax returns, private patient information and more.

As the following article shows, digitizing documents is especially pertinent for physicians and stolen tax returns: avoiding medical practice fraud.

If you’re still keeping an unlocked filing cabinet with things like copies of employee W-2s, it’s time to buy an office scanner and a shredder. Scan your current papers, shred the old papers and from now on, only use digital records.

Use 2 or 3 Step Authentication Verification

To protect your new digitized records, invest in a 3rd-party security system that uses 2 or 3 step authentication verification.

That way you can be sure that only authorized employees will have access to the sensitive information you have stored online. This will also help to reduce your insurance liability in case a beach does occur.

 

Use Technology to Prevent Shrink

Some estimates are that small businesses overall lose anywhere from $25,000 to $33,000 to shoplifting theft. That’s about $24,999 to $32,999 too much.

The technology is available to prevent this oldest of crimes, so why not use it?

If you’re running a brick and mortar retail store, you should have cameras on the floor, near the front and back doors and on the checkout points. The cameras should be working, not just fake ones for show.

Install scanners at the door and when they go off, don’t just ignore it and wave people on through with a smile. Half the time your employees are probably letting shoplifters walk free.

Use a Check and Balance System

No single employee should have autonomous control over insurance claims from your office, bank deposits, financial statements, the store vault or the cash drawer.

You need to implement a check and balance system where at least one other set of eyes is overseeing another person’s work. Make sure bank statements match up to bank deposits and withdrawals each week. Don’t wait six months before you balance your bank account.

When you maintain a check and balance system, you will catch errors and prevent the possibility for check fraud and embezzlement.

 

Be Present

Lastly, don’t rely on your store manager, spouse or son or daughter to mind the store for you all the time.

Maintain some kind of presence so at least the hint of oversight is in the air. Many times, just your presence will be enough to let people know that you’re not going to be the next fraud victim.

About the Author: Kate Supino writes extensively about best business practices.