Did you know that March is Fraud Prevention Month in Canada? What is your small business doing to limit the harmful effects of fraudulent activity?
A 2014 survey by MNP LLP found that one third (33 per cent) of B.C. businesses claim to have been victims of fraud.
Fraud may not hit most small businesses with extraordinarily high costs in the majority of cases. Among retailers indicating losses due to fraud, a large majority (89%) experienced losses of $20,000 or less. However, these costs can still have a significant impact – and small businesses are particularly vulnerable due to their size, limited time and limited resources that owners may be able to devote to internal security enforcement.
What can you do to protect your business without devoting an impractical amount of time, money and resources to the cause?
Protect Your Accounts
Keep business and personal accounts and cards separate, and use unique security codes for each. Keep a log of the people who have access to business account information, and change your passwords on a regular rotating basis (such as every quarter.) Review your expenditures and cash flow regularly, looking for unusual or unexpected entries or deviations from the norm.
Know Your Employees
While trust and amicable connection with your employees are of paramount importance in a successful small business, you must also look carefully at their behaviour if you suspect fraudulent activity. This starts with robust fact-checking and reference verification at the hiring stage, and continues with the establishment of positive rapport with employees over time. Treating your small business like a family – diligently, respectfully, with involvement and fairness – will create an environment in which employees will be less likely to seek fraudulent recompense should they feel dissatisfied with their work environment.
Create a System
Having an established fraud policy written out on paper will not only serve as a first defence against potential internal fraud; it will also provide guidance for employees who may feel as though they are put in a compromised or awkward position should they notice any signs of fraudulent activity. Making fraud prevention part of the clockwork routine of your small business, rather than a reactive, on-the-spot process, will help protect you in the long run.
Stay Secure Online
As more small business transactions take place in the e-commerce space, the risk of online fraud and cyberattacks on your business should factor into your fraud prevention plan. Every business owner should invest in a firewall as well as anti-virus, malware and spyware detection software. Backing-up your records is also a must and will make it a lot easier for you to continue working in the event of a cyber attack. Consider the value of investment in online transaction protection through reputable, verified outlets such as PayPal, VeriSign, and Secure With Visa. Anything you can do to make the online shopping experience more secure will not only have an effect on your business security; it will also inspire confidence in your customers when they make the decision to purchase goods over the internet.