How to Prevent your Business from being a Victim of Fraudulent Activity

Every business is susceptible to some form of fraud, it’s one of the most common ways in which your business could lose money. Fraud can come from anywhere; employees, customers, suppliers, or third parties connected to the business. With less resource and difficult economic conditions, some businesses tend to concentrate more on development, growth and survival, rather than managing and preventing risks. Unfortunately, these companies are left particularly vulnerable to fraud, but there are steps and precautions you can take to protect your business. 

identity fraud

Every business is at risk of becoming a victim of fraud. All businesses should follow some form of compliance to protect themselves from fraud which could result in lawsuits, damage to the business and potential loss of a reputation. It’s important to take measures to protect your business against fraud both internally and externally. The Senior Managers and Certification Regime (SMCR) is a new part of compliance to protect your business from internal fraudulent operations. It’s aimed to increase the accountability of senior financial managers within companies. For more information on SMRC compliance click the link – People Clear SMCR.

Tips to prevent business fraud

Be knowledgeable about your own business, including your employees, your target markets and legal obligations. Always be skeptical, if something seems too good to be true, then it usually is. Be sure to question and scrutinize information, transactions and documents. Know your customer and supplier market, as this will make it easier for you to notice a fraudulent one. Make sure both you and your employees understand where your business could be vulnerable to fraud. Train your staff to be vigilant and protect your business against any risks. Understand your finances; methods of payment, who can make these payments and always check your bank statements for unusual transactions. 

Cyber-attacks

Cybercriminals are reactive and can quickly adapt their methods of attack. However, there are ways to protect your business and make it more difficult for cybercriminals to attack. Take extra care against cyber-attacks, make sure you protect your technology and files and backup systems in case they go wrong. Ensure you have a firewall and antivirus software installed to detect any breaches and protect your data. Set up strong passwords and make sure your employees follow a protocol to do so also, be sure these are changed regularly. Make sure you have a separate bank account and credit cards for your business. If criminals get their hands on one account, they won’t be able to access the other easily. Check your bank’s security systems and make sure you are happy with the checks they do to protect your money. Go paperless with bills and banking, as this leaves less of a trace and stops information from falling into the hands of criminals. Click the link for information on protecting small businesses from cyber attacks.

Insurances against fraud

While there are many ways to prevent fraud and cyber attacks, it’s impossible to protect against every eventuality. Having insurance is crucial, in case your business is attacked. Look into insurance policies that specifically protect your business against identity theft and computer fraud.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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