Ways to Protect Your Business Against Fraudulent Activities
Are You Prepared To Protect Yourself from Different Types of Fraud In Business?
Operating a business opens you up to many risks, therefore, it’s up to you to protect your business against fraudulent activities.
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Table of Contents
- Are You Prepared To Protect Yourself from Different Types of Fraud In Business?
- 3 Ways to Protect Your Business Against Fraudulent Activities
reduce the risks. Every year, businesses fall victim to fraudulent activities and continue to lose millions of dollars.
In 2022 alone, 46% of businesses experienced various forms of fraud.
What can you do to secure your venture and minimize the chances of adding to the numbers?
What steps can you factor into your financial preparedness?
Discussed below are some ways.
3 Ways to Protect Your Business Against Fraudulent Activities
1. Use a Dedicated Computer for Online Transactions
A Forbes magazine report explored the security advantages of using a dedicated computer for all business finance transactions.
It revealed that companies that conduct online financial transactions on dedicated machines reduced their risks by almost 55%.
This is because computers are the gateways to the digital world.
Social media, websites, and other software applications present some risks to online security, which you should protect your business against fraudulent activities.
However, a computer dedicated to your business’s online payments has a reduced risk because of its targeted use.
Its exposure to common online vulnerabilities is greatly decreased.
This is an idea you may want to explore for your business.
Depending on the type, the dedicated computer can be in the accountant’s office or department head.
From an online security viewpoint, using mobile devices for your business’s online transactions is not recommended.
2. Conduct Employee Background Checks
According to the Business Daily website, employee fraud is more common in small businesses.
This is mainly because they do not have the multilayered anti-fraud mechanisms that large organizations have to protect them.
Therefore, small businesses are often advised to conduct employee background checks before hiring.
This is particularly vital when employing staff who will be entrusted with money, financial data, and all banking transactions.
It helps to engage the services of a good criminal lawyer to provide guidance when such employees are found out.
There is so much to lose when employees with past fraudulent records strike again because you failed to do due diligence.
3. Insure Your Business
The cost of fraudulent activities on a business is extremely expensive.
According to the US Federal Trade Commission, there were over $2.3 billion losses in 2021 alone.
This is a wake-up call for consumers and businesses.
A jump from $243 million in 2020 to over two billion dollars is a cause for concern.
Fortunately, insurance can help cushion some of the financial damage fraudulent activities can cause your business.
It is advisable to purchase a policy that provides ample coverage against such losses.
It would be helpful to find out from your insurers if the available packages offer enough protection.
Additionally, find out from your bankers what reactive measures are in store if a business account breach occurs.
Any fraudulent activity on your business’s account or credit card can be detrimental to long-term operations.
As an entrepreneur, you must know these things in advance to protect yourself and the company.
Fraud against your business can spell doom for its future.
Therefore, everything you do within the business must be guided by an anti-fraud strategy.