5 Ways to Protect Your Business from Fraud

Fraud is an issue that is better prevented than fixed Unfortunately, many business owners don’t realize that until it’s too late. A survey by the Association for Financial Professionals showed that the average small business fraud victim loses $23,100.1 As a business owner, it is wise to take measures to protect your business from fraud. Follow these tips to keep your business secure!

 

1. Secure Your Credit Cards and Bank Accounts

One of the first things you should do to protect your business from fraud is to make sure you have your personal accounts separate from your business accounts. Not only will this make sure that any possible fraudsters don’t get a hold of all of your money, it separates your personal and business credit and will make it easier to report deductions on your tax return.

Also, be sure to use your credit wisely. Make sure you trust employees entirely if you let them have access. Switch to online bill pay and make sure you store any paper documents securely. Additionally, having a secure mailbox for receiving and sending bills provides an extra level of security.

 

2. Safeguard Your Data and IT Infrastructure

Setting up basic firewall, anti-virus, malware and spyware detection software is a must for every business owner. Backing up your files will make it a lot easier for you to continue working in the event of a cyber attack. You may find it worthwhile to designate one computer for all of your online financial transactions, and, ideally, it won’t be used for anything else. Extra online activity such as social media, email and website browsing can open up your computer to attacks.

 

3. Educate (and Vet) Your Staff

Your employees can be a strength or a weakness in your attempt to keep your business free from fraud. By organizing training sessions on security threats and prevention measures, you can make sure they are a strength. It is also wise to institute policies that inform employees how to properly use and handle confidential information if you haven’t done so already.

Additionally, fraud may be stopped before it walks in the door if you commit to employee background checks. It’s a good practice for any employer, but it can be especially important for small businesses, as every employee can make a big difference.

 

4. Insure Against Fraud

While it might seem like an extra bill to pay, purchasing an insurance policy that protects against any losses from crime or fraud can be crucial. Even when you follow all safety measures to prevent fraud, having an extra safety net can really help mitigate your risk. You should also look into what your credit cards and bank are willing to do if your accounts are compromised.

 

5. Make Sure You Have a Trusted Accountant 

It’s important to have an objective set of eyes on your books. Outsourcing your financing and accounting can actually help prevent fraud — so long as you pick a great accountant. When searching for one, make sure you ask if they have liability insurance. You should also ask for references dating back several years. And it isn’t overzealous to run a criminal background check — you simply can’t be too careful about who you choose to help manage your business’s finances.

 

References

1Fuse. (n.d.). Small Business Fraud: 5 Things You Must Do to Protect Your Business Now. Retrieved February 14, 2017 from http://fusefinancialpartners.com/small-business-fraud-protection/