Business fraud refers to the deliberate act of misrepresentation for personal intent or gain. It’s expected for every business to exercise due diligence regarding risk management and internet control. But with advancements in technology also comes more advanced fraudsters looking for their next victim to prey on. It’s for this reason that companies must work harder in innovating and protecting their business for growth and survival.
Fraud can often come from anywhere like third parties, staff members, high-ranking business officials, suppliers, and customers. With the various tools and techniques now available to fraudsters, it presents an increased need to be proactive in your approach to prevent the onset of fraud completely.
You can enhance your business’s security with these fraud prevention methods that you should start implementing:
1. Use Electronic Signatures
An electronic signature or online signature is important to have if your company has switched to a digital document system. Not only does this allow you to sign documents within seconds, but it also protects the security and confidentiality of all your electronic documents. It avoids the happenstance of signatures getting forged, as is usually the case with traditional signatures.
With that in mind, there are many other convincing reasons why you should opt for online signatures for your documents, including:
- It adds to the legal value of your documents as online documents need to have signatures to make it an official document;
- It accelerates negotiations as every document is now authenticated automatically, and the right signatories can immediately be flagged in the event of any inconsistency or issue;
- It increases productivity as it speeds up the process of signing perhaps a hundred documents you may have to go through every day.
2. Know Your Employees
Even if you’re running a big business, it still pays to have a dedicated human resource team to get to know your employees. Screening them upon application is a given, but you have to go further than that by taking the time to understand the personality, habits, and even the behavior of your employees. By doing so, you can have a hint of any changes which could tip you off into a possible questionable act of an employee.
Not only will this be effective in being proactive about fraud, but you can also make your whole organization into a better place by fostering a culture that knows each other.
3. Be Skeptical
Entrepreneurs are risk-takers, but this doesn’t mean you won’t approach certain deals and offers with caution. You still have to learn how to question certain transactions such that if your instinct tells you to be skeptical about it, you can listen to that voice inside your head warning you of such.
The point to remember is if a deal, offer, person, or opportunity sounds too good to be true, then it probably is. Be certain to question all of the following:
4. Understand The Different Types Of Fraud That May Take Place
A big part of successfully preventing fraud in the workplace is being well-informed about the different types of fraud that may take place. With that knowledge, it’ll also be easier for you to identify hints that a particular fraudulent act is already happening in your workplace.
On average, these are some of the most common types of business fraud that can negatively impact your business:
- Fake money. This happens when customers and suppliers give fake checks and paper money. While this may sound impossible in today’s modern age, technology has also made it possible to create fake money that’s very similar to real money. You should have a system in place to detect fake money, so that right there and then, you’ll refuse to accept it. This includes a good POS system and a money checker, among other techniques.
- Identity theft. This refers to the act of stealing your personal and business identity for the fraudster’s gain. This is usually achieved through gaining access to financial records and federal tax ID details.
- Returns. This happens when customers use and then return goods even when those items didn’t have any defects at the time of purchase. This can be prevented by having a strict return policy in place.
Fraud is a serious and common problem faced by many organizations. Even the biggest and most seasoned businesses can still fall victim to this, especially if they aren’t cautious. There are now several ways for fraudsters to commit their crime, and if you aren’t proactive enough, your business could be one of its victims. If you feel the need to improve your fraud prevention practices, the tips above are a good place to start.