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Fraud Protection in the Workplace

If you are an owner of a small business, it is easy to gain confidence and trust in your employees and not think about the possibilities or opportunities for an employee to take advantage of you or your business. There are some simple procedures that can be implemented to protect yourself and your business in case you have an employee who is not as trustworthy as you might think. Some of the most common types of theft in a small business are billing schemes, check tampering, skimming and expense reimbursements. The opportunities for fraud are more available in a small business, as there are fewer employees and segregation of duties is difficult or not possible at all.

Procedures you should perform to help mitigate opportunities to commit fraud:

1. Go online and review bank statements and canceled checks. If you are the sole check signer, are all checks cleared signed by you, and are the amount and the vendor correct? Was the check modified after signing, or did your signature get forged?
2. Review invoices occasionally and not in a predictable pattern. Do you know the client, and is the amount billed correct?
3. If you have only one accounting person, make sure they take vacations and someone else must perform their duties while they are gone. It may require that you hire a contract accountant for that period if there is no one internally available for those duties.
4. Is your check stock in a secure location so that only employees who need access have access?

Remember that even good employees given the right circumstances can commit fraud. Limiting the opportunities can help prevent fraud from occurring.