Summary
Financial Fraud in the small business community has increased to epidemic proportions. As the economy tightens there will be a statistical rise in fraud perpetrated against business owners by employees and/or contractors. What can the business owner do to minimize the potential of theft via financial fraud?
Analysis
As is noted in the attached article, the median loss of a small business (<100 employees) has exceeded the $200,000 mark. This means that half of the reported losses EXCEED this median mark, the other half are lower than $200,000. Small business can ill afford to "waste" funds that are siphoned off of legitimate business operations by a fraudster. How much can your business afford to lose? $50,000; $80,000; $120,000; $250,000? I'm sure you would say that your losses due to fraud SHOULD be $-0-! I heartily agree! But how do you minimize your company's potential losses from financial fraud? Simple, hire a consulting firm that specializes in the eradication of financial fraud before it occurs. As opposed to taking the position that "...it won't happen to us, we have trusted employees with years of honest service to our company." Would it surprise you to know that the average fraud committed against a small business is done by a "long-term", trusted employee? There are several reasons for this not the least of which is that they have had time to "size-up" the weak points in your business practices in the years they have been with your company. During my 26+ years of investigating and prosecuting financial fraud for the U.S. Government, I have seen nearly every conceivable scheme used by employees to steal from their employers. Consider allowing a viable Fraud Consultant (preferably a CFE) to spend a few hours of consulting time in your business allowing them to identify the "weak points" in your accounting and/or business controls systems. A good consultant will provide you, the business owner or CFO, with a comprehensive report outlining the changes in business practices that should limit your company's exposure to theft by fraud.
