Tuesday, April 7, 2020

Business Education

5 Methods To Prevent Fraud From Harming Your Profits

Fraud is a major concern for all businesses because it’s costly and time-consuming. As the CEO, you can never fall into the trap of thinking fraud can’t happen in your business. In fact, 84 percent of companies worldwide experienced some type of fraud in 2017. Instead, keep these tips in mind to prevent fraud from harming the profits of your business.

Regularly Monitor Your Bank Statements

Reviewing the bank statements for your business every month is one easy way to help you prevent fraud. Whether the bank statements come by mail or email, you should always take the time to review the entries and make sure you understand why each transaction occurred. If you have any questions, be sure to immediately bring them up with the accounting department. Reviewing bank statements not only helps you understand where money is going, it also reduces the potential for fraud.

Look Over Payroll Reports

Along with bank statements, you should also frequently review the payroll reports. In many organizations, the same person who’s processing payroll is also the only person looking over the payroll reports. While this usually isn’t an issue, you don’t want to find out that your payroll coordinator was giving himself holiday bonuses that were never authorized. To make sure everyone stays honest, take a few minutes to review the payroll reports every few months.

Don’t Let One Person Handle Everything

Another easy way to help prevent fraud from harming business profits is to make sure you don’t have one person handling all your finances. An employed family member could steal thousands from a business, and an unscrupulous CPA has the ability to defraud a business of millions. Instead, make sure you have a system of checks and balances in place to immediately detect any type of fraud.

Sync Your Point-of-Sale System

If you’re selling a product, a point-of-sale system can help you keep track of inventory. For even more effortless accounting, choose a point-of-sale system that syncs at the end of the day. This syncing offers several advantages. First, syncing your inventory with your accounting software can reduce mistakes and double-entries, which will save you time and money. Additionally, syncing helps you keep your books updated all year long, making it easy to gather the necessary information for tax time.

Use Multi-Factor Authentication for E-Commerce Sites

Internal fraud isn’t the only type of fraud you have to worry about as a CEO. You also need to consider fraud that can come from outside sources, such as fraudulent payments and chargebacks. If your business deals with e-commerce transactions, you have a few ways you can protect yourself from fraud. One option is requiring multi-factor authentication for online transactions. Multi-factor authentication involves users confirming their identity with two or more types of authentication, such as a password and a one-time code sent via email or text.

By following these simple methods, you can rest easy with the knowledge that you’re protecting your business profits from fraud.

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Megan Batchelor
Executive features editor at The CEOWORLD magazine and lover of reality TV. I eat cereal for breakfast, lunch and dinner.
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