Written by Liquid
Online financial fraud and cybercrime result in losses for businesses with fewer than 100 employees more often than many people think. The Association of Certified Fraud Examiners has stated that these losses are around $150,000 on average each year. Small businesses also have larger fraud rates than companies that are larger, partially due to the amount of money and the tools that larger companies bring to the table. Solo business owners also see lower amounts of fraud, though for different reasons. One of the most frequent sources of fraud is credit card abuse, though online financial fraud can come from many different places. Few business owners take the time to review every line item on their bills. Plus, many have their business and personal accounts as the same account, making it even harder to keep organized. Using the right tools and systems when paying attention to online fraud can greatly impact a company’s bottom line.
Protect Your Company Credit Cards and Bank Accounts
A common area of fraud that many sole proprietors and employee-based companies do not pay enough attention to is the company’s credit cards and bank accounts. This is a high priority. Separating personal banking and credit cards from business accounts helps ensure that fraudsters and scammers do not get their hands on all of your money.
In addition, separating accounts makes it easier to track business expenses and report deductions on tax returns. Apart from this, separating accounts can make reporting fraud easier and dealing with insurance companies more straightforward, if needed. Companies can also take measures to make sure they know who has which credit cards, limiting access to business cards to specific employees or companies. Using your card wisely can decrease the chances of others getting access to the information on them and using them fraudulently.
In addition, using a secure mailbox for sending and receiving bills can help protect sensitive information. Many companies that do not have a secure mailbox choose to mail these items directly at the post office. Avoid leaving mail that contains sensitive information in an unsecured mailbox. In addition, checking your online banking activity daily for suspicious activity can be a good preventative measure, as this type of fraud can escalate quickly.
Boost Your IT Infrastructure
If you do not already have a firewall and antivirus software, these things should be invested in. In addition, malware and spyware detection software can help protect both your data and the data of your clients and customers. Backing up your data is essential and will make it easier for your company to continue working if a cyber-attack occurs. Talk to your IT professionals about what types of security you can implement to help protect your company.
Use a Dedicated Computer for Sensitive Transactions
This can include banking, specific types of contracts, and more. By using a dedicated computer for all your online financial transactions and using one not used for other online activities such as social media, email, and web surfing, you can avoid some of the vulnerabilities that lead to online fraud. Many companies also choose to avoid mobile banking if they can, another way to protect sensitive information.
Use a Strong Password Policy at Your Company
By instituting a password policy, which includes requiring you and your employees to change passwords regularly, you can help prevent cyber-attacks and online fraud within your company. Changing passwords every 60 to 90 days is common. Many companies also set rules to ensure the passwords their staff uses are complex.
Some also require different passwords for different system accounts and online accounts. Educating your staff on passwords, phishing, scams, and other ways people can get sensitive information is essential. In addition, many companies consider doing employee background checks to ensure they are making the right hiring decisions.
Insure Your Business
Insuring your company provides additional protection when it comes to financial data and the damages crime or fraud can bring. In addition, get more information about what your bank is willing to do to help if your business accounts or credit cards are compromised.
Some Top Reasons Fraud is Successful
In many cases, companies can do more to protect their financial information. Educating employees is an important part of the process, though some of the largest risks leading to fraud in small businesses include inadequate screening of employees before they are hired, inadequate financial controls surrounding financial record-keeping, and too much trust in other people.
While trust within the business is important, it can also help fraudsters and thieves succeed. Doing background checks and checking your accounts often is essential. Many companies utilize systems that make people sign in when making specific types of transactions or accessing specific information.
Some of the most common back-office fraud schemes include creating fake vendors, billing for nonexistent services or goods, writing checks to dummy businesses, or taking kickbacks from vendors. Fortunately, around 75% of small business owners are taking at least some steps to protect themselves against fraud. That said, most are not doing as much as they need to. Being vigilant is essential, especially with a constant influx of new technologies available to small business owners.
Keep Up on The Latest Techniques Used by Criminals
Staying up to date on the most prominent techniques used by criminals can help companies be more diligent in defending against fraud. The world of financial fraud, like the world of scams, is continuously evolving. Companies are learning how important it is to employ financial checks and balances, performing internal reviews of company finances weekly or monthly. Making sure payment amounts match all of the invoices, checking for missing documents, having random audits, or hiring a third party to audit the books each year can show your employees you are serious about fraud and up for going after thieves. This can deter would-be thieves as well.
Make sure people know you are taking cybersecurity seriously. Educate your staff, use the latest firewalls and antivirus software, and guard sensitive information in the digital realm. Protecting your mail by using secure mailboxes and securing credit card information and checks is essential. By knowing who has access to your financial information and putting proper checks and balances into place, you cannot only minimize online financial fraud and cybercrime but can also take proper measures to weed it out if it occurs.