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4 Business Fraud Prevention Checklist You Need For Your Business

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4 Business Fraud Prevention Checklist You Need For Your Business

According to the Association of Certified Fraud Examiners, a fraud case on a business can make the company have a median loss of around $117,000. Hence, we need to have our business fraud prevention checklist and go through it regularly. If you would like to create your checklist, we have several actions you can do to add to the list.

1. Communicate

The first thing you ought to do is develop communication in the office. The development can start by creating a code of conduct that employees must understand and know. A fraud workshop or training should also become a regular event in the office.

Some might believe that investing in employee fraud training is wasting capital, but believe it or not, it is an investment that will go a long way. Business owners do not execute most of the business procedures; employees do. Therefore, employees are the ones who go through the first contact with potential clients or frauds. By giving understanding about fraud to employees, you are cutting off the chance of fraud happening before it even starts. That is why it is crucial to invest in giving understanding to your employees regarding fraud because the result is worth the investment.

2. Control

After adding communication, adding control to your business fraud prevention checklist is also a must. We mean by power is establishing a system where each individual does what they are not supposed to do and does not touch any responsibility that’s not his.

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Let’s use the post office box as an example. Most of the time, the ones who pick up the mails are usually the business owner only. Even if another employee is doing it, they are usually the ones who are not responsible for deposits and revenue and mainly delve into the administration of the office. By creating control and order, it will be easier to keep track of the activities and prevent departments from being mixed up with one another. Hence, if there is an issue, it will be easier to track down the history of the activities related to the specified problem.

3. Maintain

Once you’ve established communication, control, and order, it’s time to maintain your business fraud prevention checklist regularly. You can do so by focusing on the specific department and creating maintenance activities biweekly or monthly for the said department.

Let’s say you’re making a fraud prevention checklist for the finance department. You can add weekly activities such as bank transaction reviews and monthly financial reports. By creating a regular checkup, you’re maintaining orders that can prevent fraud from bypassing the system. Once you have an excellent checkup list, assign the tasks to the correct position to minimize human error (in this case, an accountant).

Besides creating a regular checkup, it is also best to maintain a particular procedure for specific actions for preventative measures. It doesn’t have to be done in all departments, as you can do so in the critical departments of your business.

Let’s use finance-related cases again since finance is the heart of most businesses. When you are signing a check, you can add special rules such as requiring two signatures to prevent abuse from happening. Refusing blank checks and not using signature stamps – are some specific procedures you can do. They might sound simple, but they can bring a significant impact that won’t give any fraud a chance.

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4. Protect

It will help if you take proper measurements to protect your online or offline business. You should limit access to specific accounts and documents based on the person’s job. And, it’s best not to give everybody in the department access if the documents are top secret. If access is urgently needed, ensure they are time-gated so that the person won’t have access after completing the task.

The same goes for online accounts. Hand out accounts only when it’s needed, and make sure data is encrypted when they are sent out to others. Doing so will prevent hackers from getting your data.

There are several methods to encrypt the data, but the easiest and most secure way is by using VPN. Or, you can use a built-in VPN such as Chrome VPN by PIA and install it on the browsers used in the office. This method is more convenient and won’t burden your device as much as installing the full software on your device.

Besides using VPN, you can also do other preventative measures, such as updating the device with the latest software, updating security patches, and others. They can safeguard you against hackers and keep the company’s confidential data safe.

Make your own business fraud prevention checklist

You can add various activities to your business fraud prevention checklist. You can customize it according to your need, but the four abovementioned aspects are a must on your list. Once you’ve added all four aspects and tweaked them according to your needs, congratulations! You’re one step closer to creating a fraud-free business environment!

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