In business market with limited resources, tough economic conditions and inflating rise, small and medium businesses tend to focus on innovation and getting their name out there more than they worry about protecting their business from outside sources.
Why would they need to worry about that, you might ask? Well, it turns out this attitude to small and medium business management means they are leaving themselves open and vulnerable to business fraud. Being so busy looking forward means they’re not as adept at watching their back. Check out our guide to keeping an eye out for business fraud so that your business doesn’t fall prey to scammers.
What is business fraud?
To put it simply, business fraud is simply anything that is achieved in business through misrepresentation and scamming. A serviceman takes your money and does no work or very little work: that’s fraud. A supplier says his produce is organic, you find out it isn’t: that’s fraud. Scammers lying about themselves or their services in order to get your business: that’s fraud.
It’s rife in small and medium businesses, because scammers think they can get past the owners easier with less experience, and without a team of legal and business experts or a compliance consultant behind the owner, that’s usually the case – and it can be detrimental to a small business.
So, what can you do to avoid business scams?
Approach every deal and every decision you face with the idea that ‘If it’s too good to be true, it probably is’ in your head. Whether it’s a deal, a new opportunity, a networking link, documents, transactions, or information, do some research before you commit. If it’s a new service, look at reviews, if it’s a new product look into the item, you might find a better deal in the process.
Know every inch of your business
A business is your baby at the best of times, so you should know everything about it. Use this knowledge to be able to sniff out when something is off. Know how it operates, what staff you’re employing, what products and services it offers, what your target market is, your compliance and regulatory obligations, etc. Seeing something out of the norm in all of these elements of the business will make it a lot easier for you to spot when something is off.
Know your customers and suppliers
Always check the details you have on file for customers or suppliers. Due diligence can be the difference between spotting an imposter making an odd order and your business suffering a scam. At the very least, you’ll have details for who they are supposed to be and if they’re not smart enough to change them, you can hand those details over.
Identify vulnerable areas in your business
Do a sweep of your business, both internally and externally, and test your systems and operations for any vulnerabilities. From there you can identify problems and come up with solutions. Train your staff on these solutions and you’ll have a good fraud prevention system in place.
Pay attention to cyber attacks
Pay particular attention to cyber security because it is a big problem at the moment. Since remote working became more of a mainstream option, security has slackened, allowing hackers into systems to steal customer and business data.
Install malware, use a cloud, and train your staff on proper security. No more scribbling passwords of their own name on Post-it notes where anyone can see them, and no more accessing a public network without a VPN such as internetetsecurite in place to protect where they are.
Understand your finances
Look into how money leaves your business. Look at the methods of payment, who has the authority to make the payments and who checks that the payments are legitimate. Check your bank statements to make sure what’s on the receipts match. If you see something out of the ordinary, like a bigger transaction than you were expecting, or a lot of smaller payments to the same person, you might have cause for concern.
Secure your property
Look into insurance for all your business property, including laptops, computers, smartphones and intellectual property. At least if something is compromised or stolen, the insurance will cover it. You’ll get better rates for your insurance and peace of mind if you install some security cameras on your property.
What to do if you suspect business fraud?
If you do smell a rat somewhere in your business and you think it could be business fraud, you can contact Action Fraud, the UK’s national fraud and cybercrime reporting centre. They can advise you on how to move forward and how to recover from a scam. There is also information available from Action Fraud on financially motivated internet crime.
And if you know who the perpetrator is or you know or suspect that they are still in the area, you can always call the police on a non-emergency line, like 101.