Are you a doctor or other small business owner? Here’s my best advice to you for deterring fraud in your small business:
- Take a few minutes each month to personally review the bank statement for your business. Make sure that it is common knowledge that you do this every month.
- Segregate check payment, bank account, and check handling duties. Never (Ever!) allow only one person to undertake all of the following duties:
- Open the mail
- Deposit checks into the business bank account
- Reconcile bank statements
- Before you hire a new employee, get written permission from the candidate to perform a criminal background check and to pull a copy of their credit report. Because of the sensitive nature of this information, and the potential for disclosure, background checks like these should be conducted by a professional investigator or Certified Fraud Examiner.
- Keep your ears open to the company grapevine. There are certain types of behaviors that may be an indicator of the potential for fraud, such as if someone is struggling financially, excessively drinking or gambling, involved with drugs, or having an affair. Statistically, these behaviors increase the possibility that an individual could rationalize their participation in occupational fraud.
- Make sure your employees know how to report a suspected fraud. Because the majority of frauds are discovered by tips, this is an indispensable part of any fraud deterrence plan.
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