Fraud can be devastating to your business, so it is important that you take precautions to protect your business accounts.

Tips to Protect Your Business

• Use electronic statements rather than mailed paper statements.
• Put outgoing mail in a secured box.
• Computers that have access to financial information should be locked whenever employees are away – the password to log in should be strong and not something that would be easy to guess.
• When customers insist on credit for first orders, ask them for a credit card – be suspicious if they refuse a card, especially for a small order.
• Never ship a large order before a prior order has been paid in full.
• Make sure your staff is trained on fraud prevention techniques.
• Establish a hotline or some other anonymous way for fraud reporting – according to a study by the Association of Certified Fraud Examiners, internal fraud is most commonly detected by tips from employees, customers, or vendors.
• Don’t allow one employee to handle both deposits and check writing.
• Personally sign every check written and understand each payment.
• Personally review each bank and credit card statement.
• When hiring new employees, run a credit check and possibly even a complete background check.
• Audit your company’s finances at irregular times using an outside accountant.
• Pay employees well for their efforts – an underpaid and overworked employee is much more likely to commit fraud.
• Add theft/fraud insurance to your business insurance.

Sources: Tracy L. Coenen’s "A Look at Fraud Facts and Figures" published in Wisconsin Law Journal, Tracy L. Coenen’s "The True Cost of Fraud: Direct Costs" published by www.allbusiness.com, "Seven Ways to Avoid Employee Fraud" published by NFIB, and Jeffrey Moses, "Watch Out for Customer Fraud" published by NFIB.