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How can a small business deter frauds?

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There are always ways that you can ensure that frauds are not taking place in your business. You just have to learn about them and once you know what has to be done, you can escape scary frauds. And certainly if you feel things are getting out of your hand then you can always take help of professional fraud prevention teams too.

But before you reach out to any expert fraud prevention service like Dharbor, make sure that you try at your level too. You know if you think that you are not at the risk then you are simply pacifying your heart. You have no idea how small and mid-sized companies are absolutely vulnerable to fraud than that of huge organizations. Moreover the effects can be more harmful. The kinds of fraud that businesses have to be aware of usually fall into three main categories: Theft, financial statement fraud and also asset misuse. This theft, or misappropriation of assets, builds up majority of fraudulent activities.

The thefts are practiced either by stealing cash, claiming false expenses or taking other property, are generally done by staff members. Certainly it is a challenging fact for many small business owners, who mostly consider their employees as pals and even members of a lengthy work family. The other main kinds of scam involve financial statement reporting and that of general corruption. These can be like kickbacks or other schemes wherein the employee benefits personally by profaning their responsibility to the employer.

Why are these small and medium sized firms on high risk?

The reason that these small and mid-sized businesses encounter a greater risk from fraud is because of many factors, encompassing employees performing many functions throughout the organization, the intimate relationships between staff that heads to less scrutiny, couple of formal oversight procedures, less know how on financial matters, and the big impact on cash flow that even a relatively small fraud might have on the economic health of the business.Hence it is important that small businesses take measures to deter fraud, and to find out it as soon as possible.

Separate the Accounting Duties.

Du to their size, many tiny businesses have one person that always takes care of bookkeeping functions such as client receivables, paying invoices, processing client payments,  arranging petty cash and recording such functions in their accounting system. It is something that makes convenient for cases of fraud to get unnoticed. Companies should have at least two individuals handling these functions interchangeably, keep the dealing of cash and accounting tasks completely separate, or get the functions performed through a virtual CFO relationship with that of an accounting company.

Know who your employees are

Though every business strives to take honest employees, to have a formal hiring routine, even at a tiny firm, can help avert fraud. Background checks have to be performed for all staff handling cash or managing the procedure of payments from customers.

Conclusion

Thus, if you find these tasks of security really challenging then you can take assistance of Digital harbourInc and such fraud prevention services can scrutinize everything for you.

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