Among all the different dangers that business owners must navigate every day, business fraud is perhaps the most insidious.
Scammers have a range of techniques at their disposal that they can use to attempt to fraudulently take money from your company.
This may be a more prevalent issue than you think. According to SmallBusiness.co.uk, 1 in 5 UK companies fell victim to fraud between 2018 and 2020, costing an average of £16,000 each time.
Whether this is a significant sum or just a drop in the ocean for your business, losing money to a scam can be hugely damaging to your company. Not only is there the financial impact, but it can also be emotionally distressing to know that you’ve been targeted by and lost out to a scammer.
So, discover a few methods you can explore to help prevent your company from falling victim to business fraud.
Familiarise yourself with the different forms of business fraud
First and foremost, a pragmatic step to take is to learn about some of the more common forms of business fraud. That way, you can be best placed to spot the signs and prevent issues before they become severe.
Below are a few of the most common forms of business fraud:
- Corporate identity fraud – A scammer pretends to be another legitimate business, using a fake or stolen identity. They might seek money or access to your goods or services.
- Cyber fraud – A broad category covering everything from phishing attempts for important information and passwords, to malware or ransomware attacks designed to limit or prevent you using systems, extorting you for money before you can access them again.
- Insider fraud – An employee in your company acts against you, perhaps stealing important information or assets, or colluding with a third party to defraud your company.
- Invoice fraud – One of your suppliers (either real or fake) sends you an invoice that is false or inflated in value, seeking to extract money from your company.
- Cheque fraud – Similar to invoice fraud, this sees your business handed a false or altered cheque, receiving your good or service without actually paying for it.
- Return fraud – Fraudsters abuse your returns policy, perhaps returning items that do not qualify, or even attempting to return stolen goods.
While this list is far from exhaustive, these are just some of the areas that you may need to consider when looking to protect your business from fraud.
Have a fraud policy in place, and introduce it to all staff
A useful step to take can be to have a detailed fraud policy in place. In it, you should clearly explain that it’s all staff members’ responsibility to work together to prevent and detect fraud.
It’s also important to have a reporting system for staff to use if they think they’ve observed some form of business fraud, internally or otherwise.
Team members might find it difficult to speak up about fraud they think they may have come across, particularly if it relates to one of their colleagues. As a result, it’s crucial to ensure that this system is anonymous and that you treat all reports without judgement.
Taking this one step further, you could also appoint a dedicated fraud officer to oversee fraud and any reports that come in. This can be an independent role, or you can ask a member of your team to include this in their day-to-day responsibilities.
Do your due diligence on all enquiries
When new business enquiries and opportunities present themselves, it can be tempting to pursue them as quickly as possible. However, a key to protecting yourself from business fraud is in taking a beat and doing your due diligence first.
Whether it’s in the form of a “consultant” describing their services, or a company offering to help you cut costs on your raw materials, it’s vital to carry out a proper inspection of all enquiries.
Another element to consider as part of this is to thoroughly get to know your customers and suppliers. Ensure that you request sufficient customer details when completing transactions, particularly in the case of long-term contracts or high-value sales.
Meanwhile, properly vet your suppliers. Check reviews of their services or ask other business owners in your sector who can recommend trustworthy partners that they use.
Ensure that you have robust cybersecurity in place
With so much work now being carried out digitally, it’s no surprise that cyberattacks make up a great deal of business fraud in the modern workplace. According to government figures, 39% of UK businesses identified a cyberattack between 2021 and 2022.
To defend against cyberattacks, it can be worth having some form of cybersecurity in place. Many firms offer complete cybersecurity packages that you can purchase now, or you can look to implement your own within your internal IT department.
Whichever suits you best, you should treat cybersecurity as seriously as you would any other threat to your business.
Get in touch
If you’re looking for assistance in organising your wealth, please do get in touch with us.
At Rosebridge, we specialise in helping business owners to make the most of their money.
Email firstname.lastname@example.org or call 01204 300010 today to find out what we can do for you.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.