After attending a talk by a local private investigator it made me think about who you can trust these days. If we open a paper, look at updates on LinkedIn or look at the latest events on twitter, not a week goes past when a director, a member of staff or a member of a professional body has been arrested for fraud or embezzlement.
We read about the latest scam and know it’s not going to happen to us, we’ve seen through the scam, those that have been affected we tell ourselves they should have had more sense. When it comes to business though are we any the wiser. When a fraud has been found out we all say ‘ I would never have suspected it, I trusted them’. True – we would not have employed them if we had not.But what do we do to safeguard ourselves or our business against it happening.
As a small business you have probably started off either on your own or with a couple of friends or like-minded colleagues. You’ve set up your limited company or partnership and you’ve worked out how the profits are going to be shared. Have you ensured that cheques need to have at least two signatures if not what’s to stop the other director(s) disappearing with the funds when you take that well deserved holiday?While your time is spent bringing in sales or providing the great service your company is getting known for, you decide to take on additional staff. They do all the back office functions, setting up new accounts, ordering goods and making sure everything is paid on time. Their doing a fantastic job, you have no need to supervise them and you don’t want them to feel you’re keeping an eye on them.
However if they do all these functions what's to stop them setting up a false account, issuing an invoice and authorising bank payment. Small values would probably go unnoticed it's when people get greedy they tend to get caught. Make sure you have processes in place to ensure that you are keeping track of what is being bought and who from.While the majority of us are honest there are always going to be the odd one that takes advantage of a situation. If they didn’t then the fraud squad, the police and the private investigator would be out of work. The less opportunity we provide for it to happen the less it can happen.
These needn’t be expensive solutions. We have burglar alarms to put off people from breaking into our houses but we need to put solutions in place to ensure that nothing gets taken at work.These can be as simple as ensuring a second signatory on a cheque, purchase orders signed off by management, new accounts needing authorisation before being set up. The list is endless but a bit of thought can make a big difference.
As stated before the majority of people are honest but opportunity can change people and a change of circumstances can be the tipping point.