| Small Business Owners: We Need to Talk About Fraud

Posted in Finance at 4:00 PM by Loftis Consulting

All over the world, fraud accounts for approximately $3.7 trillion of losses to businesses and economies, and the typical business loses around 5 percent of their revenue. While huge corporations can often handle those losses with ease, the reality for small business owners is that it could be the difference between survival and folding. And given that small businesses simply don’t have the security budgets of the bigger companies, that 5 percent figure is likely to be even higher. The big question is, what can small business owners do about it? We’re going to take a closer look at fraud and how it affects small companies – and go through a few solutions.

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System Integrity

First of all, if you want to stop external hackers getting into your system, it is almost impossible to stop them if they have enough determination. The good news is that hackers, like burglars, much prefer easy targets. So, if your small business ensures you invest in even the most basic of firewalls and antivirus programs – and keep them updated – the majority of hackers will look elsewhere. Make sure you are making daily backups of all your data, too, and ensure you have robust encryption in place. If you are using the cloud services that are available these days, it’s vital to ask rigorous questions about how they treat security issues.

 

Employee Training – and Checking

It’s not just external fraudsters that can get into your business – your employees could be party to a lot of confidential, valuable information. Sadly, there are plenty of examples of employees who steal data and use it for their own purposes, so make sure that you are only giving data access to staff on a need to know basis. There are also plenty of ways an employee can make a mistake, so tight training on security is essential – even for basic administrators who might leave access open by leaving their computers logged in overnight, for example.

 

Mobile and Devices

If your company has an app that your customers use, make sure there are sound checks in place if valuable information is used. Nothing to do with making payments, for example, should have a lot of protection – you can try using an identity verification service if needs be. Mobile payment systems need to be watertight, too, and only allow payments from registered and recognized devices and accounts. Cybercriminals could be into your system in a flash without robust protection, and there are threats to contend with everywhere.

 

Inventory Management

It’s not just cyber security you need to worry about. Your stock is worth a lot of money, and theft and fraudulent ordering are a real threat for small business owners. Make sure that you are making regular spot checks and inventory counts, and take advantage of high-quality, highly secure management systems to control your flow of stock.

Whatever industry you are in, fraud is a serious issue for small business owners. It is essential that you put the right protections in place anywhere that valuable information or money changes hands. Failure to do so could result in an embarrassing PR disaster or even severe legal consequences.

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