Is Your Business Protected From Fraud?
In the wake of the recession, many employers have seen an increase in internal crimes, such as embezzlement, fictitious sales transactions and product theft.
According to a recent study by the Institute for Corporate Productivity the world's largest vendor-free network of corporations focused on improving work force productivity--nearly 30 percent of respondents in large companies said crime in the workplace has increased during the economic downturn and 15 percent of all respondents, regardless of company size, reported the same.
In addition to internal issues, identity theft is among the fastest-growing crimes in the nation. The Federal Trade Commission estimates that 9 million Americans have their identities stolen each year. This can be especially troubling for a small-business owner, as just one breach in security could damage your relationship with key customers and employees.
To protect your business and your customers, put policies into practice that will help you avoid becoming a victim of such crimes.
To protect the identity of your customers:
- Shred personal records. Thieves looking to commit identity theft commonly rummage through mailboxes, trash cans and recycling bins, so use a cross-cut shredder on all documents containing personal information.
- Secure your computer network. Protect your business and your customers' information with anti-virus, firewall and anti-spyware protection on your computers. Keep all software current and update it regularly. Make sure to also secure your wireless computer network to prevent hackers from gaining access.
- Adopt a security policy. Create and enforce a companywide security policy to educate your employees about security issues. Adopt simple tactics, such as turning computer screens so that they can't be viewed by others, not repeating customer information out loud, and not leaving files with sensitive information open for others to see. Make sure that when an employee resigns or is let go, they immediately lose access to your computer network and any company data.
There are a number of steps you can take to help thwart embezzlement. These include:
- Split financial duties. Consider assigning financial duties to different employees so one individual is not in charge of all aspects of the business's finances. Consider using a "for deposit only" stamp on receivables and signing every payroll check yourself rather than using a signature stamp.
- Conduct unanticipated audits. Perform unscheduled audits of your inventory and books. Regularly examine the payees listed on checks to verify they are owed money. Consider hiring an independent firm to review your records annually.
Heed complaints. If customers inquire about payments that haven't been processed, take the liberty of personally probing into the inquiry to obtain answers.
- Inquire before you hire. Before hiring, run comprehensive background and reference checks on all prospective candidates.
The foregoing article is intended to provide general information about protecting the identity of your customers and preventing embezzlement and is not considered financial advice from Union Bank. Please consult your financial advisor.