When it comes to your business, there are numerous threats that can get in the way of success. This is especially true of fraud, which should be an ongoing concern of Houston business owners. While you most likely understand the definition of fraud, you may not be aware of the many different types and how they can ruin your business.
Entrepreneur lists a few common types of business fraud, including abusing an employer’s trust by ordering too many supplies and either trading in the excess for monetary gain or putting it to personal use. While it may not seem like office supplies will amount to much, over time this practice can total up to tens of thousands of dollars, which can be devastating for a small business.
Payroll fraud is another concern, which becomes even more likely if you fail to keep good records of payroll procedures. Employees can take advantage of faulty payroll reporting systems by claiming to work more hours than they actually did, resulting in exorbitant overtime payouts. You can mitigate the occurrence of payroll fraud by reviewing balance sheets on a more frequent basis. Any suspicious issues should be looked into immediately to lessen the financial fallout.
You should also be aware of potential check fraud. Employees in charge of accounting can easily issue two checks for the same purpose and simply pocket the extraneous funding for their own personal gain. A spike in business expenses are typically not a cause for alarm, which is why it’s important for business owners to have precautions in place. Yearly reviews from an outside company can be helpful in this respect, as can having more than one person involved in accounting procedures.