More than 40 percent of small and private businesses are victims of fraud.
Not only does fraud cost your business money, but it can also affect your reputation, employee loyalty, and more.
Luckily, there are plenty of ways to protect your business against common schemes.
Keep reading to learn 5 innovative ways to prevent business fraud.
1. Have a Password Policy in Place and Enforce It
If your business does anything online, it’s important that you’re constantly updating your passwords to keep all accounts secure.
Your business passwords are changed every 60 to 90 days and follow certain guidelines, like being a certain length or containing special characters to help increase security. You should also make sure that your employees follow the same rules with passwords for their work accounts as well.
2. Screen New Employees
For small businesses and larger corporations alike, the biggest threat of fraud activities often comes from within.
Research shows that the average business loses 5 percent of its annual income as a result of fraud committed by employees, owners, managers, or executives.
From stealing inventory to submitting invoices for hours they didn’t work, there are plenty of ways for employee fraud to strike.
Before you hire new employees, make sure that you thoroughly check not only their resume, but their work history as well. Bouncing from one job to the next and refusing to offer references could tip you off that something is wrong.
3. Make Your Brand Unique and Recognizable
While the internet makes it easier to reach customers around the world, it also makes it easier for business frauds to occur.
Online criminals have been known to create a fraudster company that looks and sounds just like a legitimate one. Rather than hacking your systems and stealing from you directly, they aim to steal your customers.
Not only does this mean fewer sales for you, but it can also damage your reputation. Poor customer service, lackluster products, and other issues can make it seem as though it’s your company that is terrible quality, rather than the fake one.
Creating a unique, recognizable brand with plenty of personal touches is a good way to reduce the chances that someone will be able to create a fraudulent company.
Go the extra mile and send out old-school mailers with your company’s true URL. Use cute touches like Custom Rubber Stamps so that they stand out among stacks of junk mail.
4. Make Your Products Unique
Your brand isn’t the only thing that needs to be unique.
Once a major fraud threat that costs businesses thousands of dollars every year is fake returns. Individuals attempt to return items that were purchased elsewhere or even that were stolen.
Choosing unique products or even utilizing unique packaging can help keep your business from becoming a victim of this type of fraud.
5. Educate Employees About Counterfeit Money
Counterfeit bills can cause your business to lose cash and inventory.
Educating your employees on what to look for to spot fake bills is a great way to reduce fraud in your store.
Protecting Yourself from Business Fraud
Putting these tips to work can help you protect your company from business fraud.
But while these preventative measures will help, it’s tough to prevent all types of fraud.
Help your business balance out the effect of fraud by checking out these tips for saving money on big business purchases.