All too often we work so hard to be able to start a business, something you can call your own, something to pass down to your children. You work hard and smart, start small perhaps and watch it grow, from bottom to top as they say. 

Grooming a business has never been easy, it would be heart-wrenching to see your busy fall for any reason. A common reason many businesses fail or remain stagnant is fraud. Businesses, both large and small have crumbled to the devastating hands of fraud and would continue to fall unless business owners become aware and take deliberate steps to protect their businesses.

What is fraud?

 As a business owner, you should be concerned. Fraud is the reason why many businesses close down within a short period. It is the crime of illegally obtaining money or property using deceptive tactics. Fraud involves lies, half-truths, non-disclosure, deception and seemingly 'smart tricks'. 

Fraud involves the actions of business partners or employees that could rob you of money, or products, cheat you of the time you pay for, unauthorized use or misuse of company resources and anything that would shortchange you or the company.

Forms of fraud in business

When we think of fraud, what comes to mind? Cybercrime, money laundering, Ponzi schemes, embezzlement, bribes and kickbacks etc are all forms of fraud. These are the most common forms of fraud, the kind that makes news headlines. 

It is important to note, however, that fraud goes beyond the aforementioned. Below are other ways fraud could occur.

• Fake bank alerts; This happens daily. Both credit and debit alerts can be faked within minutes and before you know it, you're giving out a product or service that has in reality not been paid for or you are being shown a fake debit alert as proof of a transaction being done for you to be convinced and to part with your products
• Inferior goods/products; As a business owner, you trust your suppliers to only give you the best for your money, sadly though we are disappointed only too often. Receiving goods of lesser quality that you paid for is fraud.
• Incomplete deliveries; Many wholesalers are guilty of this kind of fraud. They know you are too busy to count each product piece by piece and so they take out a few and assure you that you got the whole supply you paid for. Sometimes they achieve this with the help of your employees
• Skimming; Small businesses especially suffer this. An employee makes a sale or offers a service but fails to enter the records and gets to keep the money for himself. This can also be referred to as cash theft
• Fraudulent/false invoicing; Dubious persons would add none existing items or purchases to an invoice and divert the cash for themselves.
• Ghost workers fraud; This is common, especially I'm large organizations. Non-existent staff are on the payroll while the money goes to a fraudulent employee
• Identity theft; This is another means by which fraud is committed. Fraudsters posing to be who they are not and backing that up with valid means of identification before you know it, they have stolen or deceived people who trust you in your name.
• Compensation fraud; For example, Ali had a fall while trying to change light bulbs in the office and sprained an ankle, and dislocated a wrist. If Ali claims that he has spinal cord injury and has been confined to a wheelchair so that he can get more in terms of hazard allowance and compensation benefits, what do you call that?

Tax evasion, misuse or abuse of company property, and intellectual theft are also forms of fraud that we do not talk about enough in this part of the world. That though does not make them any less fraud than embezzlement and Ponzi schemes.

Having known the common and uncommon ways by which fraud is committed, how then can you protect your business and prevent fraud?

How to avoid fraud

1. Cross-check every purchase thoroughly.
2. Make use of invoices and receipts.
3. Have an accountant and have regular random external audits.
4. Keep accurate and detailed records of everything.
5. Minimize credit sales.
6. Be credit/debit alert smart, you can read about how you can identify fake credit and debit alerts.
7. Conduct background checks on new employees.
8. Encourage a whistleblowing culture in your organization.
9. Rotate the duties of those in the accounts/finance department so that one person does not become too comfortable.
10. Pay your staff good money for their hard work. Poor salary is not an excuse for theft or fraud of any kind, but it is a motive.

The essence of this article is to make business owners both large and small more aware of threats to their businesses in terms of fraudulent activities and how to protect their businesses. It is a common saying that 'knowledge

 is power',  now that you have been empowered, do your utmost to protect your business.  

At SmartSMSSolutions we are committed to helping you grow your business through our excellent digital marketing campaigns. We offer a bulk SMS service to meet your communication needs.

SmartSMSSolutions is not limited to offering bulk SMS service, we also have great content on communication and how to increase productivity in your business. Visit our blog here.