Fraud Management Tips : Top 7 Most Effective

Fraud Management Tips : Top 7 Most Effective

According to ACFE (the Association of Certified Fraud Examiners), companies with fewer than 100 workers lose roughly $155,000 to fraud every year. Credit card abuse is the most common fraud source because many business owners mix personal and corporate spending or they don’t closely examine their statements. Other fraud stems from a lack of security throughout the company. Below are some fraud management tips business owners can use to protect their companies from some of the most common types of fraud.

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Top 7 Most Effective Fraud Management Tips :


Safeguard Bank Accounts and Credit Cards

Because this type of fraud is experienced by almost every business, it deserves a place at the top of this list. Begin by separating business and personal accounts, which will ensure that a fraudster won’t have access to all the business owner’s money. Separate accounts make it simpler to track business expenses and report tax deductions. Use cards wisely, and opt for online bill payments wherever possible. Lastly, check online banking daily for suspicious activities.

Tighten up IT Infrastructure

Every company owner should invest in malware, spyware, antivirus software, as well as a corporate firewall. Frequent backups are a must, and they make it easier to continue operations after a cyber attack. It’s a good idea to use a dedicated PC for banking and to avoid using it for email, web surfing, and other online activities.

Educate Staff Members

Employees are a weak link where fraud is concerned, but they also provide a strong defense. Company owners should hold regular training on security threats and prevention for both new and current employees. Enforce training by implementing policies guiding employees on the proper handling of confidential information such as financial and customer data.

Run Background Checks on Employees

One of the simplest fraud management methods is to make good hiring decisions. Basic background screenings are a good idea for any company, especially those where employees handle cash, expensive merchandise, or sensitive data.

Insure the Business

Cybercrime and fraud happen, but company owners can protect themselves by buying insurance policies that shield them from losses due to fraud or crime. Similarly, the business owner can find out how their bank can help in the event that an account or card is compromised.

Monitor Employees’ Vacation Time

While some bosses are impressed by employees who never miss a day of work, and they value these workers for their loyalty, it could indicate the employee has something to conceal and is worried someone else will find out they’re committing fraud. It is a good practice to rotate employees to multiple positions within a company. This method may reveal fraudulent behavior, as it allows the second employee to monitor the first employee’s activities.

Have a Strong Corporate Culture

A good work environment can make fraud management easier. The company should have a clear structure, written policies, and fair practices. Open-door policies can provide a great fraud deterrent as they provide employees with an open line of communication with managerial staff. Senior employees and business owners should set a good example and hold everyone accountable for their behavior regardless of their position within the company.

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