Running a small business is tough. It’s even tougher when you have to worry about the looming threat of financial fraud. Due to a lack of resources, small businesses, especially new ones, are prime targets for fraudulent activity.
Preventing fraud can seem like an exhausting task. However, there are a few easy steps you can take as a small business owner to protect your financial assets. Here are some viable prevention options to keep your business safe.
Educate your employees.
Your employees are your first line of defense against business fraud so it’s important to have an informed workforce. Explain to your staff how scams happen, as well as ways to recognize possible red flags and exercise safe practices.
Ask questions, even if it annoys your team.
As the business owner, it’s your responsibility to actively review your company's financial records. Spot-check reports and ask hard questions. You probably have a general idea of what the numbers should look like. If you see something out of the ordinary, press your team about it until you get an answer that satisfies you.
Partner with your bank or credit union to prevent unauthorized transactions.
Do your employees have company credit cards? If so, you are at a higher risk for fraud. Talk to your bank or credit union about products that safeguard your business account from unauthorized transactions. For instance, Louisiana FCU offers all members free access to MyCardRules™ — a mobile app that sends real-time alerts every time the company card is used, and gives the account holder the power to decline suspect transactions and set location barriers marking where the card can or can’t be used. To effectively reduce the threat of financial fraud, monitor your company’s credit card activity closely and let your employees know you're watching.
Be aware of employee behavior.
Keep an eye on employees who seem unhappy, stressed, or have shown signs of financial difficulties. Same for employees with access to the company’s operations who never take vacation or sick days. So many business owners are absolutely shocked when their “hardest working” employee is caught stealing. The fact is, what you perceive as strong work ethic could actually be the employee's need to maintain a scheme without being caught.
Your finances are the lifeblood of your business. It’s common for a busy small business owner to put fraud prevention on the back burner until a major issue arises. Make it a point to follow these tips to help prevent fraud.
Keep an eye on your kingdom. MyCardRules™ allows business owners to control how, when, where — and WHO uses their Louisiana FCU card. Don’t just monitor your finances, be the BOSS of them (corner office not included).