How to Protect Your Small Business Against Financial Fraud

NASE Blogs

How to Protect Your Small Business Against Financial Fraud

Nov 15, 2022
Fraud

Fraud happens when a person, or group of people, misrepresent their intentions. Usually, the motive is financial, and a fraudulent action more often than not results in a major loss for the victim. For a business, as well as in personal life, this can have devastating consequences. Therefore, there should always be protective measures installed to counteract any attempted illicit activity.

Be In-The-Know About Your Finances

The first step to take is to gain a deep insight into the financial model of the business. Aim to understand every incoming transaction, expected outgoings, supplier costs, trading costs, taxes, fees, and ongoing costs too. All of this information can be incorporated into a document known as a budget. For businesses, the budget is an essential lifeline that you cannot do without.

Use Bank Verification Platforms

Platforms like Yodlee bank verification were created with protection as the core focus. This is one of the most accessible formats to ensure that incoming or outgoing transactions are what they say they are on the label. Not only does it protect against human error, for example incorrect data entry regarding account numbers, but it has active features to combat money laundering and more. The example of Yodlee bank verification is NACHA compliant, heavily regulated, and credible. These are all desirable qualities when selecting a verification platform that suits your profile and meets your needs. 

Establish Trust With Suppliers

Getting to know your suppliers is a natural part of running a company. When you are depending upon a service being reliable, it is vital to verify its capacity to fulfilling your needs. Go through the selection process carefully, and always lean on other reviews from the industry to guide your choices. Some suppliers are not trustworthy and operate on a fraudulent basis, therefore putting your whole operation at risk through lost money and missing inventory.

Protect Your Tech

The most common fraud methods happen online. Modern commerce, though it has found profound advantages in the function of technology, has also increased its vulnerability to cybercrime. That is why it is more important than ever before to protect your tech with substantial anti-virus and malware software. Be in the know about how to spot a suspicious inquiry, and keep everything up-to-date with the current developments at all times.

Identify and Secure Weak Areas

The best way to protect your business is to know your business. Perform a monthly audit of all the components such as stock intake, customer relationships, marketing, and accounts to ascertain weaknesses and strengths. Where there are vulnerable areas, take immediate action to counteract any negative consequences that may arise. Take a broad approach and consider what your competitors are engaged with as well, as not falling behind the curve of commerce trends is beneficial.

Conclusion

Protecting against fraud should be a standard task for business owners. Criminals are constantly operating and adapting, therefore to stay safe, you have to stay vigilant. Keep up to date with current regulations and innovations, and implement them into a wider strategy with a view to securing finances.

Meet The Author:


Ella Woodward

Ella Woodward

As a woman making her way to the top of the corporate ladder, Ella Woodward has the expertise and business knowledge to guide readers through the latest developments in the fast-paced business, financial and investment spaces. She has the contacts, instincts and insight to discover the latest deals, trades and organisations that are worth your time. Being in constant demand, she’s made this blog as a resource for you to see a small selection of the work she’s done over the years.

More...

Courtesy of NASE.org
https://www.nase.org/about-us/Nase_Blogs/self-made/2022/11/15/how-to-protect-your-small-business-against-financial-fraud