Unexpected Capabilities. Unmatched Service.

3 Ways to Mitigate Small Business Fraud

Business fraud is rampant. If that sounds overdramatized or exaggerated, consider this: a 2014 global fraud study found that the “typical” organization estimated that it lost 5 percent of revenues annually to fraud. According to the Association of Certified Fraud Examiners, that translates into nearly $3.7 trillion a year.

And small businesses really took it on the chin. Per the study, “The smallest organizations tend to suffer disproportionately large losses due to occupational fraud.”

In other words, no matter how trustworthy your employees seem and no matter how secure your system checks seem, small business fraud is a terribly real and substantial threat. But there are a few ways you can mitigate your fraud risk.

How to Mitigate Small Business Fraud

  1. Background Checks: When you sift through resumes and ultimately interview a candidate, you’re not just doing that to spin your wheels – you’re trying to ensure that you’re hiring the right person. The importance of that decision at a small business is amplified because of your size. Think about it: If you started your own small business from scratch, then when you make your first hire, your first worker will literally be half of your workforce. And given the nature of small businesses, employees often have outsize access to vital company information. So whether you’re hiring someone to handle the register, or field phone calls, make sure to perform a background check – or if you can, hire a background check service provider.
  2. Fraud Risk Assessment and Deterrence Systems: Many small business owners simply aren’t aware of the various ways their company could be susceptible to fraud. Sure, you have locks on the doors and an antivirus program on any computers dedicated to business use. But you might have gaps in your company policies that open you up to internal fraud, or lack a proper fraud reporting system. Fraud risk assessments help you find the problems and prioritize them – and on the back end, deterrence systems help you guard against those various types of fraud. McManamon & Co. can help you with both. Via our fraud risk assessment and deterrence systems services, we analyze your company to find weak spots, and then we help you put in place systems to guard against fraud in the future.
  3. Fraud Insurance: It never hurts to play with a backstop. In the event that your company is a victim of internal or external fraud, crime/fraud insurance plans can cover your losses from a number of sources, such as forgery, robbery and computer fraud. Many financial institutions that provide small-business services also offer some measures of protection against and recourse after fraud.

In the end, if you are the victim of fraud, McManamon & Co. also provides fraud investigation and forensic services that can find the source of the problem and help you reclaim whatever went out the door.

Whether you’re a victim of fraud or just want to make sure that dreaded day never comes, call us at 440.892.8900 or contact us online. We can help you protect what you have, and recover what you’ve lost.

Tags:  , , , , , | Posted in Fraud, McManamon & Co., small business