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How to Avoid Business and Employee Fraud

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Smaller companies can be more susceptible to business and employee fraud and the damages can harm the company’s long-term evolution. There are several types of fraud, among which asset misappropriation, accounting frauds or data theft. Business owners who suspect that they may be facing more than one type of fraud can reach out to a fraud solicitor.

How to Avoid Business and Employee Fraud

Business and employee fraud? Know your employees

The success of a company is, to a great extent, influenced by the quality of its employees. Making sure that you hire trustworthy employees is important and you can do so by starting with a regular background check.

Having clear policies and rules in place is essential for letting your employees know what the company’s treatment for these types of activities will be. Moreover, as part of those policies, communication with the employees should be clear: there should be no doubt about the fact that the company has zero tolerance for theft.


Regular internal controls and auditing

Internal controls are essential for detecting any potential frauds or thefts. These should be performed regularly to make sure that any suspicious activities are detected as early as possible. Business owners can also decide to perform these internal controls unannounced to prevent employees for attempting to cover fraudulent activities.

Regular book auditing is also a practice that can highlight any cash misappropriations, irregular refunds or product returns as well as others. These non-schedules books audits can help detect frauds.


Updated security

Employee time tracking systems as well as other security software, such as time tracking software, should be updated to ensure maximum protection.

Identity theft, payroll fraud, worker’s compensation fraud, embezzlement, skimming, and internal theft are all business and employee fraud to which a company may be subjected. Small businesses can be more vulnerable to embezzlement than other medium or larger companies can because in their case, one individual (the bookkeeper, for example) has access to all or most of the company’s financial activities.

Business owners who respond quickly and justly to employee fraud will make it very clear to the rest of the employees that these actions are not tolerated within the company. Safeguarding against  should be a priority for any business owner.


business and employee fraud is a feature post – you might also value my post on what should a business do with surplus stock

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