29 Oct Fraud is Frightful!
As consumers we are constantly hearing about ways to protect ourselves from fraud and identity theft. As business owners, however, it is not something that may be top-of-mind. Small businesses are typically more susceptible to fraud because they lack awareness about the issue and do not usually have internal controls in place to prevent it.
Additionally, many small business owners are lulled into a false sense of security – they think it can’t happen to them – and fail to see the warning signs until it is too late. As vendors in the Arise network of Independent Businesses, your company is responsible – both legally and financially – for any fraudulent acts committed by your Client Support Professionals. The simple fact is that one act of fraud committed by someone in your company can destroy your business.
Below are some tips on how to help prevent fraud in your business. We encourage you to review this information and do your research. Arm yourself with the knowledge and help FIGHT THE FRAUD!
- Screen potential agents thoroughly
Making sure you hire the right employees is the best way to stop fraud before it happens. The completion and successful passing of the background check required by Arise should not have any impact on your company’s decision to hire an agent. Many companies implement a thorough screening and interview process which often includes verification of past employment and references. Because many individuals who are experiencing financial difficulties are more prone to committing fraud, it might also be a good idea to run a credit check. Before running any reports or checks, or for any specific legal questions, Arise recommends that you obtain the advice of a qualified professional.
- Implement internal controls to reduce the risk of fraud
It might be a good idea to get a risk assessment by a qualified 3rd party – like a CPA experienced with internal financial controls. If that is cost-prohibitive for your company, there are many other steps you can take like (i) making sure your staff is well-educated on what constitutes fraud and (ii) effectively communicating your policies. When employees understand that internal controls are in place and that fraud prevention is a priority, the likelihood of fraud is significantly reduced.
- Lead by example
It is important that, as a business owner, you serve as a role model. If your employees see you take a careless approach toward company policies and procedures, you are inviting your staff to do the same — or worse. Make it clear to your staff that acts of fraud will not be tolerated and be sure to conduct a prompt and thorough investigation of every incident.
- Make it easy for your employees to report fraud
Every company should have a system that makes it easy for their employees to anonymously and confidentially report suspected fraudulent activities.
Make sure that your company is armed with the tools necessary to help prevent fraud. If you don’t – the consequences could be scary!