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Protecting Your Business From Fraud-Are You Doing Enough?

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Protecting your business from fraud and theft is a tough job these days – are you doing enough as a business owner to ensure that your assets are safe?

Did you know that according to a 2010 report from the Association of Certified Fraud Examiners, incidents of occupational fraud are 31% more likely to occur at small business as opposed to larger companies?  And, to add insult to injury, as many as 40% of small business owners are embezzlement victims and that a staggering one-third of all bankruptcies are the direct result of internal theft!

To be hones, I had no idea of these statistics – until I read a very interesting article yesterday called Five steps to prevent small business fraud, in the Hartford Business Journal Online.

The article discussed:

  • Managing finances using secure online banking
  • Protecting computer systems and practicing online awareness
  • Safely handling sensitive documents and financial statements
  • Obtaining fidelity insurance {which protects your business against criminal acts such as robbery, embezzlement, forgery, and credit card fraud}, and
  • Incorporating appropriate checks and balances

The author, Michael LaBella, offered some excellent advice about incorporating appropriate checks and balances;

Every small business owner should perform an internal review and assessment of company finances on a monthly basis.  Make sure payment amounts match all invoices and check for any missing documents.  Running random audits or having a third party audit your books once a year will show your employees you are serious about fraud and deter them from committing deceptive acts.

While that’s very good advice, I don’t think it’s quite enough, below are some additional tips for protecting your business from fraud.

  • As a business owner you should be signing all of the checks written on your company checking account – throw out the signature stamp and don’t use the QuickBooks option that allows checks to be printed with your signature already in place!  That’s just asking for trouble…..
  • Balance your checking account and credit card statements each month – that way you can “see” those transactions and verify where the company’s money has gone.

Yes, this means more for you to do as a business owner – and I’m sure that you already have a full plate – but isn’t it better to be safe than sorry?

What safeguards do you have in place to protect your business from fraud?

I hope you’ve found this article to be helpful and thought provoking, if so please take a moment to leave a comment or share it with others on your favorite social media platform using the buttons below.

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert

I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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