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Two Steps You Can Take to Safeguard Yourself from Fraud or Theft

This item is the second in a series of articles I am doing to showcase the topics of Fraud and Theft. Much of the information came from a publication I received from Intuit - the Intuit QuickBooks Fraud Primer. This item shares facts and figures and highlights two steps YOU can take to safeguard yourselves and your business(es) from becoming a victim. Feel free to share with others!

Did you know...

  • 60% of businesses were exposed to actual or attempted payments fraud in 2013.

  • 82% of those businesses were victims of check fraud in 2013.

  • 43% of businesses were exposed to credit/debit card fraud.

  • Businesses experienced $23,100.00 in typical fraud-related losses

  • Only 10% of businesses recovered the full amount of money defrauded from them.

  • 30% recover NOTHING.

Do you believe your bank will have your back? Most likely it won't... Banks are not required to help you if they determine that your business did not practice due diligence in protecting yourself. According to the US Treasury, if the bank can prove your actions (or inaction, as the case may be) contributed to the fraud or theft perpetrated on your business, then you may be at least partially liable. You can find all the "411" in the Uniform Commercial Code, Article 4, section 4-406. According to the authors of Intuit QuickBooks Fraud Primer, "(i)t's a real page-turner.

Are you at risk? I've told clients - past and present - that they are susceptible to being ripped off, plain and simple - as long as they:

  • Do not keep their books current, or they

  • Do not look at their bank statements, or they

  • Do not keep adequate records or well-organized records, or they

  • Do not have good internal controls in place to safeguard their most important asset, their checkbook.

What you can do: If the above items describe YOU in any way, then don't despair: there are some simple steps you can take RIGHT NOW to begin the process of protecting yourself. Just doing these two simple things can put you on the road to increased security and protection of your financial assets.

  • Reconcile Your Accounts Regularly. If you wait too long between reconciliations, then you are opening yourself up for fraud or theft occurring before you even realize what has happened. By the time you discover it, it will be too late ... and you will have NO recourse with your bank, credit union, or credit card companies! Do your best to regularly monitor your financial balances and look for suspicious activity. And make sure to reconcile your bank and credit card statements on a monthly basis while the information is still fresh. That way, you can see as you go whether transactions are correct so you can take action while everything is still fresh and recent in your brain! And it's just easier to remember everything while it's still current.

  • Limit Your Exposure. A key to limiting your exposure is to stay organized by creating a sound system for record-keeping to include locking up your blank checks, using a sound system for filing company financial records, and separating financial-related duties where practical. For example, the same person should NOT be logging in the checks, depositing them, entering them in your accounting records, reconciling the statements, etc. "Mom and Pop" shops must be extra-vigilant and can adapt many of these controls to fit their situation. Being able to demonstrate sound systems in place will lessen the chance of being ripped off, while strengthening your case of proving due diligence in the event of fraud or theft was to occur.

Get started! You cannot completely protect yourself. But you can certainly lessen the chances of fraud or theft at your company by doing just these two things. And that' s a LOT more than many small businesses are doing. So what are you waiting for?? {Big Grin!}

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