In regards to managing your finances as a business owner, it is critical to always be vigilant. Signs of fraud can be easily detected if you take the time to constantly review your financial records.
The impact fraud can have on your business can be significant. Not only can it have a substantial financial impact, but it can also destroy an organization.
While there are many forms of fraud, the following are a select few which can cause the most damage:
- Payroll fraud – This is one of the most common types of fraud that affects businesses both small and large. Employees may ask for pay advances without paying them back, employees may lie about the hours worked on their timesheets, or employees could get co-workers to clock in for them even if they aren’t working.
- Over-ordering fraud – If you have a client or customer who would routinely over-orders and receives items from your company, even when it is considered unnecessary, you should take a closer look. There are many instances where an employee—who is responsible for ordering supplies—may over-order items, and then return items the company did not need in exchange for a gift card or cash.
- Double-billing fraud – This is the act of paying a specific bill or invoice twice, under the same account name or codes, where one payment is made to the actual vendor and another, separate payment is illegally made to your bookkeeper. To keep an eye out for this type of fraud, have an outsider check your books and reconciliations annually at random times, so you can check for any discrepancies.