Yes, fraud can happen to your business
Business owners don’t usually notice fraud losses right away because the frauds are typically hidden in various accounts and paperwork. Padding time sheets, inventory theft, billing and payroll schemes, or confiscating receivables are easily hidden inside the books and can remain hidden for quite some time before they are revealed. Most fraud and employee theft comes to the attention of the employer by either an anonymous employee tip, or by accident.
What can you do to reduce the risk of occupational fraud, waste and abuse? The most effective prevention measure is the fear of getting caught. But the longer frauds go unnoticed and nobody is caught, the more damage is done. According to the ACFE’s Report to the Nations, the median duration of fraud – the time from when the fraud started until it was detected – is 18 months. That amount of time can do serious damage to a smaller business.
When it comes to smaller businesses, usually weak or non-existent internal controls, or a breakdown in the company’s processes can create a prime opportunity for an employee to steal. Inadequate separation of duties, the absence of mandatory vacations, a company constantly in flux with rapid turnover of employees are all examples of opportunities to commit fraud. The best approach is a proactive approach, taking steps to minimize the risk of occupational fraud, waste, and abuse. It may also require a business to think like a thief: “If I were going to steal, how would I do it and not get caught.”
So what are you waiting for? Fraud to strike when you least expect it? Don’t be crazy. Download an eBook now to kickstart your fraud prevention!