Valley First

Fraud Prevention for Business

Whether you've got a large business or a smaller 'mom-and-pop-shop', it’s important to consider how fraud can affect your business. The following information can help you begin the process of putting systems in place that will save you time and money.


Protect Your Account

Know and protect your account

Protecting your business account information is a key measure in minimizing the risk of fraud against your business.

  • It’s important to be familiar with the terms and conditions of your account agreement with us – that way, you’ll know what you are responsible for as a business account holder.
  • Protect your passwords so that the integrity of your financial information is secure, and risk of fraud can be minimized.
  • Take the precaution of protecting your computer(s) with a firewall and the latest anti-virus and anti-malware software.
  • Review your account activity regularly so that you can see whether there are transactions going through your account that you haven’t authorized.
  • Secure your computer files through encryption and ensure your computer is password protected.
  • Put a process in place for authorizing transactions if you don’t personally have capacity to authorize each transaction. As a best practice, separate the duties, so that one employee prepares the transaction (e.g. writes the cheque), while another employee authorizes it (e.g. signs the cheque). Or, simply require two signatures for each transaction. This type of dual authorization will minimize risk of fraud.
  • Protect your account information including the information you have gathered about your customers.

Hire Good Employees

Employee Management

According to research, typical organizations lose nearly 5 percent of their gross revenues to fraud each year, through employee theft of inventory, assets, cash, or company documents. Protection from employee fraud will minimize your losses.

  • Anti-fraud controls, including cameras, have an impact on reducing losses due to internal fraud. Ensure you tell your employees and customers that you have these cameras on the premises.
  • Screen your job applicants, by calling their references and doing background checks. This way, you’ll know you’re hiring employees you can trust.
  • Ensure your company policies are clear and well-communicated so that employees understand how they are to conduct themselves in the workplace.
  • Require dual custody (two people) for sensitive documents and items like account transactions, business name stamp, cheques, etc.
  • Ensure your employees take their vacations. This may seem odd, but you’d be surprised at how many employee fraud instances have been uncovered simply because the employee committing fraud was unable to maintain the fraud while on vacation.

Reduce the Risk of Bookkeeper Fraud

Protect your business from being a victim of bookkeeper fraud with these added tips.

  • Access your bank, credit card, and loan statements online and discontinue using paper statements. Or, have paper statements mailed to your home.
  • Review your bank, credit card, and loan statements thoroughly for suspicious transactions before you provide them to your bookkeeper. Pay close attention to the front and back of your cheques for forgeries and also review your deposit slips, especially for any unauthorized "less cash" amounts.
  • Consider taking a course in bookkeeping yourself so that you understand the general process. This will help you spot any fraudulent activity more easily.
  • Understand your bookkeeper's accounting system and the various reports that it generates. Regularly review reports such as bank reconciliations, financial statements, payroll reports, and aging reports for suspicious transactions.
  • Consider making your own bank deposits.
  • Open all mail yourself.
  • Avoid giving signing authority to your bookkeeper.
  • Personally sign all prepared cheques, and never sign blank cheques.
  • If you're bookkeeper resigns or is terminated, change the accounting system, banking, and other applicable passwords immediately.
  • Have a Certified Fraud Examiner with a solid accounting background perform a periodic review of your accounting records.
  • Avoid providing one bookkeeper with access to both your business and personal financial information. For this reason, it is better to use two part-time bookkeepers than one full-time bookkeeper.

Protect Your Premises

Protect Your Business Premises

  • Keep all your sensitive documents and business valuables in a secure, locked place where only you or those employees with dual custody can access them.
  • Keep a close eye on your Point-Of-Sale (payment) terminals, and ensure they are secured, so that thieves can’t tamper with them to record card information.
  • Check your inventory regularly so that you can detect losses right away.

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