Proper paperwork
Paperwork is a vital part of the puzzle for you as a business owner. You need to be able to trace every single payment for at least a year so that you can ensure that you know where your finances are going. At any point, the bank or your investors could raise questions and you have to know the answers.
Purchase orders are probably the best way that you can tighten up the process of money leaving your company without your knowledge. By needing approved signatures for all things bought for the company, down to the pencils and their sharpeners, you can minimise the risk of overinflated payments to suppliers and even additional stationary that isn’t needed. Making sure that you have a paper trail for all purchases means that when you go over the books, you can link every outgoing to a receipt or a payment made.
Be the last
When you run a business, everything stops at you. Accountability for everything is in your hands; so those who invest money and time with you and your business to grow it will look to you to ensure things are managed correctly. When the buck stops with you, you take on an incredible responsibility. To ensure that you are staying on top of all aspects of your business, you should be the last person to sign and send any payments. Don’t blindly sign a check and allow someone else to mail it for you, no matter who they are. If you sign a check, be prepared to send it off straight away so that you know it’s definitely gone where it should go.
Protection is more than your job
Cash and assets need to be protected from internal and external fraud at all times. You should ensure that every employee knows all the procedures pertaining to fraudulent activity and transactions. If every single employee in your management team is vigilant about fraud and how the company could be affected by it, it’s easier for people to spot irregularities.
Let the sales team do their own audits, but back them up with random spot checks. Let the warehouse team have a full inventory of products and materials to use as a guide at all times, but double check without notice. By asking everyone in your management team to work with you to spot irregularities, you can be better protected.
Discovering that your business has been a victim of fraud is the beginning, as with the losses that come with being defrauded, you also have the costs of hiring in investigators and forensic accountants to work out the extent of the fraud. You also may need to pay out for IT specialists to trace payments.
The positive thing here is that we now live in a time where the digital expertise at our disposal is excellent at being able to pinpoint where things go wrong. Bringing in law enforcement should be one of the first things that you do, because regardless of why the crime was committed a crime was still committed.
You need to be able to come down hard on fraudsters so that others will see that you do not tolerate it in your organisation. The risks of fraud can be minimised if not erased, and with some vigilance, you can keep your company safe.
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