Financial fraud can be devastating to your business. You have been working on something for many years could all come crashing down. The employee you trust the most can use their privileges the wrong way and embezzle business funds. According to a report, financial fraud within businesses can go on for 12 months without the owner noticing.
One surefire way to protect your business from fraudsters is by hiring an experienced Southwest Florida accountant. An accountant can detect fraud before anyone else in the company and warn you about the signs. They can create and review financial statements and detect fraudulent activities before they cause too much of your loss.
Most common types of fraud schemes found in businesses
- Payroll fraud.
Payroll fraud can happen in numerous ways. An employee can deceive the owner by falsifying certain targets, sales counts, and unit figures to gain a payment they have not earned in the first place. Another similar fraud shows that you have worked overtime for an extra payment. Some employees also do timesheet padding.
- Asset misappropriation or skimming.
While asset misappropriation is a common fraud in businesses, it is also easy to spot. Common signs of this type of fraud include forged checks, missing inventory, and transactions that do not add up. Skimming is the act of taking money from a client or customer but not including it in the company records. This one can be difficult to spot if you do not keep a check on your payments.
- Account fraud.
Fraudsters do not always exist in the same company. Sometimes, hackers may get inside your business or company account and steal money for months or years without your knowledge. This can happen through fraudulent emails, malware, or other means. The hackers may make unauthorized transactions or steal by transferring money to another account. To prevent this, make sure to protect your devices with strong anti-hack and anti-virus software.
- Invoice fraud.
Invoice fraud happens when an employee of the same company creates fake invoices to steal money from the company’s finance department. For example, submitting invoices for goods that were never bought. They may create dummy supplier accounts to transfer the money. That is why it is important to cross-check every invoice and conduct a background check on every supplier.
These are some of the most common frauds that are found in businesses across the United States. To prevent becoming a victim and losing your hard-earned money, having someone who oversees the finance department, cross-checks financial statements, and can detect fraud is important.