Cheating or fraud is one activity that causes big losses in business. A survey found that a third of businesses fall victim to fraud. Of these, unfortunately only 5% of businesses consider fraud to be a high risk to their business.
Fraud can come from anywhere. Generally, the sources of fraud are divided into two, namely internal fraud and external fraud. Internal fraud is usually carried out by the employees themselves. Some examples of fraud committed by employees are embezzlement of funds for personal use, fraudulent ledger records, and so on.
Meanwhile, the potential external sources of fraud are much broader. The culprit can be done by a third party or even the customer himself. Some examples of fraud that customers can commit are providing fake transfer evidence, and so on.
To avoid potential losses due to fraud, taking preventive measures is something that must be done to protect a business. There are at least six ways to prevent fraud in business. Read more below!
Business owners must ensure that their prospective employees have high credibility, can be trusted and relied on. There are several easy ways to check, such as auditing social media accounts, finding out credit scoring, and investigating the background of prospective employees.
The biggest cause of fraud committed by employees is the financial problems that surround employees. For example, employees are in debt that is large enough to make it difficult for them to pay back the debt. Because of these conditions, employees will try various ways to solve it, including opportunities to be tempted to commit fraud.
To prevent fraud due to employee personal financial problems, companies can help by holding financial training tailored to employee needs.
Standard Operational Procedure (SOP) is often considered a theoretical formality rule, as a result many employees ignore SOP. This can then trigger fraud, because there are several procedures that are ignored by employees.
Even though the SOP is made so that the work results obtained are in accordance with the quality standards that have also been previously set. SOP also guarantees that all processes that occur in the business are in accordance with the plan. If this rule is ignored, there is a high risk of fraud.
To prevent fraud from happening, every employee should be disciplined and comply with the established SOPs. Business owners may be able to encourage employee discipline by implementing a reward and punishment system. With strict monitoring of SOPs, if there is fraud, it can be detected as early as possible, so that several actions can be taken immediately to prevent further fraud.
Business owners must have detailed and accurate records. Accurate and detailed record keeping is very important, because without strict inventory control, business owners will not know how much product they might be missing.
Furthermore, detailed accounting records can also assist business owners in tracking incoming and outgoing money.
The next way to prevent fraud is to hold regular impromptu audits. In this way, the perpetrators of fraud will feel afraid that their fraudulent actions will be discovered. At the same time, this action also makes other employees aware that the business owner is monitoring them closely.
So far, fraud is synonymous with financial aspects. In fact, fraud is not only related to financial activity. It is also possible that there are other fraudulent actions, such as theft of important company data. Therefore, business owners must establish strict procedures against sensitive data access.
That is information on how to prevent fraud in business. Cheating can have a serious impact on a business's profits. Because of this, it is necessary to take some precautions to protect the business from unforeseen threats and bankruptcy in the future.
Cheating or fraud is one activity that causes big losses in business. A survey found that a third of businesses fall victim to fraud. Of these, unfortunately only 5% of businesses consider fraud to be a high risk to their business.
Fraud can come from anywhere. Generally, the sources of fraud are divided into two, namely internal fraud and external fraud. Internal fraud is usually carried out by the employees themselves. Some examples of fraud committed by employees are embezzlement of funds for personal use, fraudulent ledger records, and so on.
Meanwhile, the potential external sources of fraud are much broader. The culprit can be done by a third party or even the customer himself. Some examples of fraud that customers can commit are providing fake transfer evidence, and so on.
To avoid potential losses due to fraud, taking preventive measures is something that must be done to protect a business. There are at least six ways to prevent fraud in business. Read more below!
Business owners must ensure that their prospective employees have high credibility, can be trusted and relied on. There are several easy ways to check, such as auditing social media accounts, finding out credit scoring, and investigating the background of prospective employees.
The biggest cause of fraud committed by employees is the financial problems that surround employees. For example, employees are in debt that is large enough to make it difficult for them to pay back the debt. Because of these conditions, employees will try various ways to solve it, including opportunities to be tempted to commit fraud.
To prevent fraud due to employee personal financial problems, companies can help by holding financial training tailored to employee needs.
Standard Operational Procedure (SOP) is often considered a theoretical formality rule, as a result many employees ignore SOP. This can then trigger fraud, because there are several procedures that are ignored by employees.
Even though the SOP is made so that the work results obtained are in accordance with the quality standards that have also been previously set. SOP also guarantees that all processes that occur in the business are in accordance with the plan. If this rule is ignored, there is a high risk of fraud.
To prevent fraud from happening, every employee should be disciplined and comply with the established SOPs. Business owners may be able to encourage employee discipline by implementing a reward and punishment system. With strict monitoring of SOPs, if there is fraud, it can be detected as early as possible, so that several actions can be taken immediately to prevent further fraud.
Business owners must have detailed and accurate records. Accurate and detailed record keeping is very important, because without strict inventory control, business owners will not know how much product they might be missing.
Furthermore, detailed accounting records can also assist business owners in tracking incoming and outgoing money.
The next way to prevent fraud is to hold regular impromptu audits. In this way, the perpetrators of fraud will feel afraid that their fraudulent actions will be discovered. At the same time, this action also makes other employees aware that the business owner is monitoring them closely.
So far, fraud is synonymous with financial aspects. In fact, fraud is not only related to financial activity. It is also possible that there are other fraudulent actions, such as theft of important company data. Therefore, business owners must establish strict procedures against sensitive data access.
That is information on how to prevent fraud in business. Cheating can have a serious impact on a business's profits. Because of this, it is necessary to take some precautions to protect the business from unforeseen threats and bankruptcy in the future.
