What is Business Fraud?
Depending on the size of their operations, company owners may have to deal with enormous number of employment and financial tribulations that they need to address on a daily basis. A single mistake in making decision may instigate a bigger problem that may affect the entire operation of the company.
Thus, they must make sure to avoid engaging with deceitful practices of other parties in order to lessen the risk of losing probable income due to credit extensions and over employment.
Business fraud is a deceitful act that aims to deprive an individual or an entity of their property or rights that may result to economic injuries. This type of illicit activities is considered as one of the primary causes why most small and medium scale businesses fall due to bankruptcy.
How to Avoid Being a Fraud Victim
Do not offer credits to individuals or companies that you still have no considerable acquaintance yet. Try to inquire with your references and obtain a credit report before transacting with other parties. Watch out for counterfeited statement of accounts. Many fake companies utilize misleading invoices to cheat on other firms practically making them pay for products and services that have not been provided. Ask your personnel not to divulge any information regarding your office equipment through a phone call. In some cases, fraudulent companies pretend to be the regular suppliers and provide you with over-priced company equipment. Be sure to implement a Privacy Policy in your company. This seeks to secure the identity of your customers and employees. Be careful with individuals who make large purchases through credit cards and demand for speedy services. Most of the times, these people cannot present their valid I.D. to prove their ownership of such credit cards. Never send checks or money through mail in paying an invoice. A lot of instances have been reported wherein mailed checks have been stolen and altered. Have monthly account verification with your bank. This will enable you to detect any stolen and altered checks and resolve this problem right away. Supervise your employees. Make sure that they are utilizing company assets, as they should be. Employees whom you have found guilty of theft should be reprimanded or should be punished depending to the extent of their violations. Be sure that your employees are competent on handling their jobs especially those who are assigned in doing financial matters and making company transactions. Consult a qualified business lawyer in drafting your company rules and policies. This is to make sure that certain provisions that tackle employment fraud will be included in your regulations.
By: Rainier Policarpio
© 2010 Business Continuity Audit
