Fraud is a concern for companies of all sizes, but small businesses may be particularly vulnerable. Owners may place their trust in a handful of people and may not have the time or resources to provide their employees with in-depth training. Here are some tips to protect your business.

Choose Workers Carefully

Checking a prospective employee’s background and references is always important, especially when hiring someone who will handle money, credit card transactions, payroll, or bookkeeping. A person in one of those roles will have access to sensitive information that could be used to commit fraud. 

Provide Appropriate Training

Make sure that your employees understand the numerous forms that fraud can take. If your business accepts cash or checks, train everyone who collects payments on how to spot counterfeit bills and fake checks. Instruct workers to verify the date and amount before accepting a check. Tell employees that they will not be punished or retaliated against if they report suspected fraud.

Protect Sensitive Data

Be sure that your company’s credit card information and tax ID number and employees’ dates of birth, Social Security numbers, and bank account information are kept secure. Those types of data could be used to create fraudulent accounts, orders, or payments. Safeguard trade secrets and information on company operations, plans, potential mergers and acquisitions, and other data that an employee could sell to a competitor or use to his or her personal advantage. 

Don’t Give One Individual Too Much Power

Having one person control everything related to your company’s finances and human resources may be convenient and may allow you to avoid paying multiple salaries, but it can put your business at risk. If one individual can make purchases, write checks, and handle payroll and knows that no one else will keep a close eye on things, that can allow the employee to commit fraud. Divide financial tasks between two or more people and bring in an independent auditor at irregular intervals, without warning.

Monitor Employees’ Hours

Payroll fraud can occur when an employee lies about the number of hours he or she worked or when one employee clocks in or out for another. Tell workers that such behaviors will not be tolerated and consider using a system designed to prevent fraud, such as one that identifies employees by their fingerprints and tracks their hours electronically.

Review Your Insurance Coverage

If you own a business, make sure that you have the appropriate types of insurance and high enough coverage limits. Petruzelo Insurance can help you understand your options when it comes to professional liability. Contact us today!