In fact, there are many ways to spot and stop fraud from continuing, but you’ll need a keen eye and a handful of helpful tips to get you started. So, here are four ways to spot fraud in your business, and what you can do about it when you’ve realised it’s happening.
What Is Business Fraud?
Before we get started, let’s just cover what business fraud is so that you can identify it with more ease. Business fraud is the intent or act of misrepresentation to cause a gain or a loss. In business, this could be a fraudulent person lying about their situation in order to gain more money or products, or something more serious like an employee using their position to gain information for profit.
There’s a lot of various things that could be covered under the term “business fraud”, and small to medium businesses are particularly susceptible to fraud because the owners are typically unaware of the risks and challenges that they face. It’s important that you, as a business owner, can recognise fraud. It doesn’t matter if it’s your customers you suspect, your employees, or the suppliers you work with. Anyone can commit fraud if they have the right incentive.
Tip 1: Be Sceptical About Everything
The moment you realise that something doesn’t sound right, or a deal sounds too good to be true, ask for facts, ask for paperwork, ask for a lawyer to look over the proceedings. If something sounds too good to be true, it probably is. Question every transaction, every piece of information, and every “official” document that crosses your desk.
Tip 2: Know Your Business And Your Clients
From customers to suppliers, get to know every person and every company that your business does transactions with. When you understand your business inside-out, you’re more likely to be able to catch something that looks off. Use risk-based approaches to everything when you’re checking customer details or supplier information. Take nothing at face value, and always ask for proof.
Tip 3: Talk About Fraud
Fraud doesn’t have to be scary if your employees know what they’re up against. Let them know that the moment they find something suspicious, they should report it to you as soon as possible, before they close any deals. An “I’ll call you back later today” could save a company a lot of money when dealing with a fraud.
Tip 4: Offer Training
Lastly, offer fraud awareness training to your employees and all of your staff members across your business. Arm everyone in your company with the information they need to be able to help the business thrive. It doesn’t matter if that training is bespoke, off the shelf, in person or online, delivered by your internal people or an external professional – just make sure you provide your team with the tools they need.
At Debtcol, we work closely with businesses all around the country to improve their cash flow, manage their finances and prevent fraud through effective and proactive debt collection. Our investigative services mean you can check out any clients or suppliers before you commit (avoiding costly mistakes), and our ongoing debt recovery services mean you never have to worry about chasing unpaid invoices again. For more advice or information, just get in touch with the team today.