With 33% of all business failures or bankruptcies due to fraud, it’s extremely important to take proper precautions in order to protect your business from fraud. In this article, we’ll go over some warning signs to look for, as well as some tips on how to manage financial responsibilities within your company.
Hire the right people. Managing the books is a huge job. But as a business owner, it’s often not realistic to take on the role of an accountant amongst all the other things on your plate. That’s why it’s critical to hire honest employees who will stay in control of your bank accounts. You need to be able to trust that they monitor every little expense that’s going in and out, so they can detect anything that seems suspicious, such as frequent overdrafts or small withdrawals. Background checks are always a good business practice for this reason.
Protect your computers. Sometimes having the best accounting team in the world isn’t enough to stop fraud. Without proper passwords or firewalls, hackers can easily access all of your financial information stored on your computers. Make sure to take the extra steps to create complex passwords and change them regularly. It’s also smart to dedicate one computer to banking only. When there’s no history of web surfing, emails, or social media sign-ins, hackers will have a much harder time with such a limited entry point.
Use an outside accounting firm. A great way to protect your business from any sort of bookkeeping fraud is to hire a third-party accounting firm in addition to your internal accounting department. This practice will greatly reduce the risk of errors and will quickly detect any dishonesty from within the company. This quick detection is crucial because the earlier fraud is detected, the more money and stress you save your business. With the average time being 18 months for a business to detect fraud, many times it’s too late to recover the money.
With so many techniques and tools available to protect your business from fraud, it comes down to staying aware and making sure you’re overseeing all aspects of your business. Visit Associated Bank’s website to learn more about business fraud, and see what products you can use to help prevent it.
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