We all wish we lived in a world where others think like us and have the same morals we do, but we need to forewarn you that there are people out there in the job market who don’t share your vision. They are the small percentage of job seekers who hide important information about their job history so that you will feel comfortable enough to offer them a position.
The problem when you encounter these types of situations is that small businesses normally don’t take the time to prosecute employees they know or think committed fraud. These employees understand this so they tend to ride the high employment wave into jobs that no one else is available to take. With unemployment less than 4% we want to remind you how important it is that fraud prevention be part of your company’s culture, particularly during the hiring process.
While we all attempt to avoid hiring such types, it is better to be safe than sorry in this high employment environment. What helps most to protect against this risk is the amount of attention that a business owner devotes to fraud. Dedicating time to fraud prevention sends a powerful message to employees about its importance and empowers honest employees to help sniff out the not so honest ones.
At Czar Beer we suggest that you structure your work and day-to-day responsibilities with an eye toward fraud prevention so that it can be stopped in its tracks. To do so we recommend several business routines that will help minimize loss. They will also improve employee performance and security, and positively affect your overall business prosperity.
We’ll say it again, these business routines will guard against fraud, make things better and allow you to better prosper. Who’s listening now?
Simple precautions can save you from future fraud trouble:
- Research who you hire – Conduct due diligence with thorough interviews, references checks and past employer calls. Don’t skip formal background checks: they’re required to build a trustworthy team.
- Separate duties – Don’t give any single employee too much authority. Structured separation of duties with financial checks and balances helps you avoid concentrating too much power in one person and gives you and your employees the confidence that business finances are being handled correctly.
- Educate employees – Set up training sessions to teach employees how they can help prevent fraud with due diligence and adherence to operational guidelines, roles and responsibilities.
- Prepare your business for fraud strikes – These strikes are most likely created internally. That’s right, we watch the bank and credit card statements for items incorrectly posted from outsiders and the risk from inside is about two thirds as much. Research shows that 37% of fraud is initiated by internal sources.
By expanding precautions, you can add more security:
- Conduct frequent account reconciliation– Only half of small business owners review bank statements, credit card charges and accounting books. Frequent reconciliation identifies financial red flags early. Online banking services provide transaction, balance and utilization reporting for easier reconciliation.
- Fraud audits – Regular fraud audits signal your commitment to reduce fraud and keep your business secure. Reduce risk and uncover weaknesses with audits and reviews by your Certified Public Accountant.
Whether you are a business, individual, or non-profit, the Czar Beer team can outline specific steps you should take to minimize fraud and secure your business’ sustained growth.
For more information, contact us at firstname.lastname@example.org or (212) 397-2970.