According to the Association of Certified Fraud Examiners’ 2012 Report to the Nation on Occupational Fraud and Abuse, U.S. businesses lose 5% of their revenue each year to employee fraud.

What can you do:

  1. Scrutinize new hire resumes and check everything. Is the job applicant vastly overqualified? Is a CPA applying for your bookkeeper job?
  2. Do background checks on potential hires. If the applicant lived out of state for any length of time, call to check references.
  3. Really keep track of your money. Reconcile statements in a timely manner. The longer you wait, the less likely it is that the bank will cover the fraud. You may have as little as a 30-day window to catch fraud issues.

Virtually every theft starts with a very small amount of money. It usually takes about 18 months for evidence of fraud to surface.

The amount of the monetary loss for a fraud is usually higher for a smaller firm versus a larger firm.

Most banks don't look at signatures on smaller dollar amount checks. Banks do look for certain things such as: Is the check in sequence? Does it show the correct dollar amount? The bank rarely looks for forged signatures.

Any time you write a check and put it in the mail, you've compromised your bank account. From that check a thief has everything needed to get money from your account.

When someone embezzles, you should always file a 1099 for the embezzled funds. The IRS will come after the embezzler and get them to pay taxes on what they stole!

Be more aware when there's a long weekend. Certain crooks wait to target firms over long weekends.

Tips to Try:

Every month tell your bookkeeper to give you one or two random unopened statements from your clients – instead of leaving all of them to the bookkeeper. Random statement reviews can really help prevent fraud.

When business credit cards come in the mail have them given, unopened, directly to you or your account manager instead of having the receptionist open them. Whoever opens the mail can easily jot down everything they need to go online and make purchases with that card.

To learn more about how we can help you reduce the risk of fraud in in your small business, contact one of our Treasury Management specialists by contacting us, or calling (800) 599-0020, Option 2, Monday through Friday 5:30 a.m. – 7:00 p.m. (PT).