The good news is there are things businesses can do to help deter fraud in your organization. Most of these will not cost you a dime and can be controlled by the business in hopes of being proactive versus reactive which is critical when it comes to fraud.
1. Adopt a written code of ethics for your business. Next share it with all of your employees. Let them know what you and the company stand for.
2. Perform background checks before hiring employees. A good background check will cost about $ 75 but it could save thousands. This is especially important when hiring supervisors or manager level employees. This is one small proactive step a business can take to really make a difference concerning fraud. You can identify unacceptable employees and you are making a statement up front that your business is serious about preventing fraud.
3. Train your employees on fraud. Define acceptable behavior. For example, is taking one pencil home considered fraud? Or is taking a whole box of pencils home fraud? If you the owner or manager can’t answer this question, chances are the employees will not be able to answer this either. Eliminate the gray areas.
4. Be proactive in all that you do within your organization, no matter the size. Often time’s smaller companies fail to do an effective job of adopting policies and procedures and communicating with employees because they assume everyone already knows everything. If you don’t care your employees won’t care either.
5. Restrict bank account access. In today’s world everything is online. Do not be so quick to give out your user name and password for bank account access. You can never be sure who else this information is shared with.
6. Perform regular bank reconciliations. Reconciling bank accounts should be a routine function of any accounting department. As an owner or manager take a proactive step and actually perform a reconciliation yourself or check the bank statements for irregularities on a regular basis. The key is to have segregation of duties for key and sensitive areas. Do not give one person all the power. Remember to eliminate the opportunity to commit fraud.
7. Secure your inventory and supplies. Do not provide your employees with the opportunity. Lock up valuables and secure inventory and supplies with a key. Maintain the proper logs to identify who is accessing these areas and for what reason.
8. Conduct surprise audits on a regular basis. This doesn’t have to be complicated it could be as simple as asking to see the inventory control log. It just lets employees know you care about your business.
9. Provide a method for employees to report fraud anonymously. Tips are the number one way most frauds are discovered.
10. If you suspect or discover fraud call an expert. Calling an expert could determine whether or not your case can be prosecuted and whether or not restitution is awarded.