Tips to Protect Your Business from Fraud

5 Business Fraud Prevention Tips

You often hear stories about fraud against individuals, however, businesses are just as susceptible to fraud. A business constantly deals with customers, employees, and vendors. This leaves businesses more open to the possibility of being defrauded. When businesses are defrauded, in many cases, there is some sort of financial loss, which is never a good thing for a business. While it may be difficult to prevent every attempt of fraud to your business, our business fraud prevention tips can help you take precautions to minimize fraud.

Secure Your IT Infrastructure

The ever-growing supremacy of the internet along with digital technologies continues to create more opportunities for businesses. However, this growth also produces more opportunities for cyberattacks against vulnerable infrastructures. Your IT networks should be protected with firewalls and anti-virus, malware and spyware software. Data policies should be kept up do date and computer data should be backed up regularly. Employees should be trained on cybersecurity so they are aware of the possible threats and how to safeguard against these dangers.

Read here for more on business cybersecurity.

Implement a Password Policy

Another simple yet effective step you can take to protect your IT infrastructure is to implement a password policy. Set rules to ensure passwords are complex and required to be changed after a specific amount of days. Make sure you have a different password for every system account.

Have Strong Contracts in Place

Fraud can occur when a vendor or contractor withholds on the goods or services they were hired to deliver, over-charge, or bill for work that was not performed. This can be prevented by making sure you have solid contracts in place and by thoroughly vetting vendors beforehand. This can all be done with the help of a business lawyer. Invoices and purchase orders should also be reviewed to ensure they are valid and that you are getting everything you purchased.

Protect Your Finances

To prevent potential frauds of getting a hold of all your money, separate your personal bank accounts and credit cards from your business accounts. This will also make it easier to track business expenses and report deductions on your tax return. Make sure your credit cards are used wisely by authorizing it only to trusted and familiar employees or companies. Also, be sure to check your online banking regularly for suspicious or unauthorized transactions.

Run Appropriate Employee Checks

Employee fraud can take place when employees skim cash, steal supplies from the business, use company credit cards for personal use, write bogus checks to themselves, or misuse company assets. To prevent fraudulent employee behavior, it is imperative to ensure your business hires the right people. Pre-employment background checks on prospective employees are a good business practice, especially for those employees who have financial duties or access to sensitive data.

Looking to start a business or grow your current business? Or maybe you’re looking for more business fraud prevention tips? Contact FL Patel Law today by visiting our website or calling (727) 279-5037.