5 Fraud Prevention Steps for Your Business

fraud prevention

Has your company worried about its financial and legal security and wondered, how can businesses prevent fraud? If so, you might want to start taking these fraud prevention steps right away. Even in the best-run companies with thorough Orlando Commercial Crime Insurance in place, fraud can still happen at any time, so it’s best to be on the defense and be prepared.

Try implementing these five steps in your business today to help avoid situations of fraud.

1. Understand the Different Types of Fraud To Look Out For

Fraud can occur in many forms, and it’s best to prepare for all of them. Look out for these three common types of fraud in particular:

  • Corruption, including conflicts of interest, extortion, and bribery
  • Asset misappropriation, such as falsifying reimbursement claims, stealing money from the company, and stealing other non-monetary company assets
  • Financial statement fraud, including hiding assets, inflating revenues, or hiding liabilities

2. Establish Trust With Employees and Create a Simple Reporting System

A business that runs on trusting relationships is a business that often has a strong shot at long-term success. Interestingly, this does not seem to be limited to financial success – establishing more trusting workplace relationships could help prevent employee embitterment and subsequence revenge fraud. One way to foster a system of trust in your business is to create a simple reporting system where employees who suspect fraud in the company can make a quick and anonymous report.

3. Get To Know Your Workers and Watch Out for Suspicious Attitude Changes

Knowing what your employees are usually like – and when they’re behaving strangely – can, perhaps surprisingly, be another preventative measure against fraud. Get to know your workers, and be on the lookout for sudden, suspicious attitude changes.

4. Build Up Safeguards in Your Accounting Department

Your accounting department is likely one of your most vulnerable areas for fraud, so make sure to set up built-in safeguards in this department. For instance, you could:

  • Avoid assigning too many duties or responsibilities to the same employee
  • Carefully document all sales, money transfers, and all other financial transactions
  • Keep backups of all financial records in a safe place
  • Number purchase orders, invoices, checks, and more in consecutive order to make tracking easier
  • Create a database of potential financial embezzlers and instruct your accountants to keep an eye out for them

5. Work With Experts Who Can Help Pinpoint Potential Issues Early

If you don’t have enough in-house experts to help you identify areas where the company is vulnerable, you may want to hire professional consultants. These experts could include, but are not limited to:

  • Certified public accountants
  • Certified fraud examiners
  • Police investigators
  • Forensic analysts
  • Auditors

Although your business may already have Orlando Commercial Crime Insurance, it’s still important to actively prevent fraud by taking proactive prevention steps. Put these five steps in place to help keep fraud out of your company.

About The Hilb Group

Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.