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How Your Business Can Protect Itself From Fraud?

by Louise W. Rice

Interestingly, small firms are more vulnerable to fraud than medium and large businesses. The most common culprits are credit card transactions. Employers are slack when it comes to reconciling their accounts. They also use their business credit card for personal use. We look at how small companies can protect themselves from fraud.

Keep Accounts Separate

There must be no crossover between your private account and your business account. Keep your credit card in a safe and don’t leave details where they can be found. You should be the only one to work with the card. This will also allow you to complete your business tax return without confusion.

Rather than purchasing small amounts of stationery, for example, buy bulk and have it delivered. This is better than sending an employee out with your card. Have a dedicated, secure mailbox to send out accounts and receive notices of payments.

As a daily rule, check your account so that you immediately become aware of any unauthorized transactions. Do a complete reconciliation. Check your bank statements line by line every month.

Online Security

Back up your files so that if your system crashes, your work is not lost. You can use a dedicated server or desktop for this. Install a firewall, anti-malware, virus protection, and a spyware detector. These must operate in real-time as well as run full scans according to a schedule.

Online Banking

Allocate a desktop to be used solely for online payments. Make sure it has an ultra-strong password that only you know. Don’t permit any social media or online searches on this computer, as this is where many problems creep in.

IT Policy

Put an IT policy in place. There are numerous templates you can use or adapt to fit your needs. Make sure that it has procedures on how to create a strong password and how often employees must change their passwords.

Perform Background Checks

Ideally, all your employees should be properly vetted before they are hired. One bad apple can spoil the bunch. However, any staff members who will be handling any financial aspects of your business must be screened with a background check.

Account Verification

Achieve bank-quality security levels with ACH payments. The account verification process requires validating all payers upfront. However, once this has been done, it makes it super easy to send or receive recurring payments without using a credit or debit card. This method is designed to reduce fraud.

Yodlee provides verification and account validation. The account verification happens in real time. In the past, accounts were verified by getting the payee to receive a small payment and transfer it back immediately to prove that the account belonged to the person. With ACH payments, this is not necessary. Neither bank account numbers nor routing numbers are needed.

Don’t be one of the many small business owners who are caught off guard by attempts to defraud them. Put the necessary methods in place and do your routine checks thoroughly.

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