Fraud Prevention and Security Tips for Businesses
Building a business is hard work and most business owners spend a great amount of time keeping their businesses up and running.
Our bank is committed to providing solutions that will enable our business customers to mitigate exposure to fraud. Below are tips to help protect your business.
|Tip #1||Maintain confidentiality. Do not place specific account or routing numbers on your websites. Have your customers call you for special (wiring) instructions.|
|Tip #2||Set clear standards. From the beginning, establish clear standards including an appropriate example and ethical tone. An employee manual explains the principles and values for your organization, and in a small organization, it levels the playing field to keep rules from becoming arbitrary. If you ever need to appear in court due to an employee's dismissal, the manual can be a reference to explain what actions warrant dismissal.|
|Tip #3||Check employee references. When hiring anyone, check references and perform background checks of employment, credit, licensing and criminal history. The benefits far outweigh the cost. For example, rethink hiring a bookkeeper with bad credit since the pressure of crippling financial obligations could turn an otherwise honest person into a thief.|
|Tip #4||Secure your organization. Closely guard and monitor your checks. Use pre-numbered checks to help audit for missing checks and identify checks clearing out of sequence. Keep all checks under lock and key, and avoid distributing keys. You should also have a voided check procedure, never sign blank checks and review disbursements regularly. Scan for, and then examine, checks made out to unfamiliar suppliers, checks made out to cash or missing check numbers. Utilizing account information solutions, such as On-Line banking and Positive Pay, can also help minimize potential check fraud. Finally, train your staff in your security systems and disciplinary policies/procedures.|
Safeguard payroll. Try to review every payroll check personally. Though time-consuming, it can effectively ensure employees are paid appropriately, which may be a bigger concern if you have temporary and part-time staff. You can minimize time spent writing and reviewing checks by using a disbursement tool like payroll direct deposit to help automate the process. Also, maintain certain duties separately whenever possible, even in a small business.
|Tip #6||Control who reviews sensitive documents. You can maintain a separate post office box for receiving bank statements, customer receipts or any other sensitive documents to help eliminate the chance someone will intercept mail in order to steal or to cover up an earlier theft. Another alternative is to receive eStatements through online banking and give yourself sole access.|
Consider independent review. Since theft often occurs when bookkeeping is sloppy and unsupervised, your organization's account reconciliations and general ledger balances should be reviewed independently by a person removed from daily transactions. Familiarize that person with your bookkeeping/record system to permit spot checks and reviews to better safeguard your organization.
|Tip #8||Review your bank statements monthly. Business owners need to review bank statement information each month. A careful review and verification of checks written and deposits made can help detect fraudulent activity. In addition, CPAs can be hired to take on some of the independent review function or provide bookkeeping services. Be aware that a CPA will not necessarily uncover fraud, but will enhance the control environment. CPAs can review monthly finances with the owner, helping to spot trends indicative of fraud or to find opportunities to enhance profitability.|
|Tip #9||Consider annual audits. Although not always required, an annual audit will give an opportunity for someone removed from daily operations to provide an overall review of your organization's risk. An audit also tends to motivate bookkeeping-related staff to keep things honest because they won't always know what questions an auditor may ask or what documents an auditor may request to review.|