Fraud Prevention Month: 4 Ways You Can Keep Your Business Safe and Prevent Internal Fraud

March 12 2024

As Fraud Prevention Month begins, businesses are often reminded of ways to prevent external fraud. When you think about protecting your business from fraud, we often think about external factors like theft or scams. We don’t always think about internal fraud being a factor that can threaten our business. Every organization should have a plan in place to help prevent fraud and reduce loss. Whether you are a small business or a large enterprise, we have a couple tips that can help you protect your business.

    1.  Create Employee Awareness with Education

A great way to raise awareness about internal fraud is to create an employee education/training plan. This can be done multiple ways.

  • Planning: Your IT team or HR Department can put together a presentation and schedule a company-wide session, or smaller group sessions, to discuss how to recognize fraudulent activities and what to do when this is suspected.
  • Training: There are companies that can be hired to come in and do preventative internal fraud training with your employees.
  • Policy: Regularly revisiting this material and ensuring all staff are up to date on internal fraud policies can help catch any red flags!

    2.  Monitor Financial Transactions

It is important to have a designated person or team who closely monitors all transactions, bank statements and other unusual activity. Doing so can be as simple as ensuring all employees provide detailed invoices when submitting their expenses for full audits of accounts. This can flag any suspicious activity or discrepancies that appear in their records.

Companies can also hire external auditors who review from an outside perspective. This is something that can be done at least once a year and has proven results.

    3.  Personalized Login Credentials

Sometimes, businesses allow employees to share accounts, especially when external, paid-by-license software is involved. When this happens, it becomes almost impossible to keep track of red flags, making it much easier for an employee to cover up their tracks.

    4.  Screen All Employees 

  • Background Checks are a great way to find any red flags that may indicate if a candidate or employee has a history of problematic conduct/behavior. No one wants to believe that their own employees could be responsible for internal fraud, but the reality is we don’t always know who we are hiring.
  • Criminal Background Checks are the standard in most industries. They are a quick and convenient way to screen if a new hire has any criminal activity on their record.
  • Credit Checks are not just for banking or finance. Are you hiring someone who deals with money at your company? Whether a server or a retail worker, we recommend a credit check. This gives you peace of mind knowing that you can trust your employees with any cash flow, credit cards, etc.
  • Professional Designation Checks are crucial to determine whether candidates can perform necessary, relevant tasks at an acceptable level. For example, this type of check can confirm that the new Chartered Professional Accountant (CPA) you hired has, in fact, received proper training. Although we tend to not question someone’s resume, it is crucial to screen employees who have specialized education.
  • Reference Checks are another way to get a more personalised background check on future hires. These are customizable and can provide great insight, such as the type of employee candidates were in the past and whether previous employers would hire them again.

There are multiple ways that you can protect your business against internal fraud. Creating a transparent workplace environment with ongoing training and screening is a great place to start. By implementing these strategies you can help reduce the risk.

We hope you found this helpful and if you are interested in learning more about how you can use Triton background checks to prevent internal and external fraud, please reach out to sales today.