A business is one of the investments exposed to multiple risks, including fraud and cybercrime. When a business fails in this area, it can result in loss of time, money, reputation, and even legal issues. Therefore, you are required to use every method possible to reduce your business’s exposure to these risks. Here we will look at ways of reducing the amount of fraud your business is exposed to so as to protect yourself from such threats.
1. Implement Internal Controls
The first thing that any business organization should do to reduce its exposure to fraud is internal controls. They protect fraudulent activities within an organization and make sure they do not happen. In addition, internal controls also help to prevent employee misconduct and ensure compliance with ethical standards inside the business. Once implemented, they have proven effective in reducing the amount of fraud exposure.
2. Use Automated AP Software
You need to monitor all transactions made within your company or through a third party. The software you choose for doing this must be easy to use. This means it must be able to send alerts whenever something goes wrong. You should also automate actions such as payouts made on behalf of customers or employees. Doing this reduces human error, which increases the exposure to fraud. Some automated AP software enables you to track the entire transaction flow throughout the payment process, including initial customer communications to final payout. It enables you to identify suspicious activity early and take immediate action. This helps to prevent future exposure from occurring.
3. Hire Trustworthy Experts
When it comes to cybersecurity, experts are important to keep up-to-date with changing technologies. As technology evolves constantly, new methods of attack emerge. Hiring trustworthy experts will help you stay ahead of attackers when designing new security solutions. These professionals keep themselves updated with the latest techniques used by hackers and other malicious actors. In fact, they should be consulted about designing systems and procedures that would minimize your business risk.
4. Regularly Review Your Records
One way to reduce fraud exposure within your business is to regularly review relevant records. For example, if you use different vendors and suppliers for providing services and products to your clients, review all payments received and verified statements issued. Ensure that everything is correct and check whether there is anything out of the ordinary regarding a specific vendor or supplier. Regularly checking your records ensures that nothing slips through unnoticed. Additionally, you can compare monthly sales with preceding months to determine if anything has changed. If you find something unusual, notify your accountant immediately. It will allow him to address the issue before it becomes a bigger problem for you.
5. Educate Employees
Employees must understand what constitutes fraud and why it happens. A good place to start is educating them about common types of fraud and ways it can be prevented. While training alone may not completely eliminate fraud, it could be one way of minimizing your exposure to it. For instance, you might ask each staff member what they know about data breach laws and regulations. Also, give them guidelines on protecting sensitive information from unauthorized access. An employee who understands his or her role in preventing cybercrime can act faster and more decisively when required. Therefore, he or she can better protect your organization.