Fraud is a growing problem as is almost always the case in times of austerity.
Some fraudsters are plain “wrong un’s”, others are opportunists, some have addiction issues and some act out of desperation. Regardless of the motive, if your business is the victim of a fraud, it could be the death knell.
Most frauds are uncovered after the damage is done, perhaps by chance, by an error from the fraudster or during an accountancy audit. Chances are that the money defrauded has long gone by this point and irrecoverable.
As the saying goes “failing to plan is planning to fail”. Fraud could easily destroy all the time, effort and devotion you have put in to build up your business.
In previous posts I have outlined some ways to minimise the chances of being defrauded, but how about a new approach ?
Introducing the “fraudit”
A great way of combating fraud is to put doubt and worry in the mind of the fraudster. He, she or they may not be worried or even thinking about the consequences of defrauding you, but he, she, they do not want to be caught before they can even spirit away what they are after, so deterrence may well be highly effective.
A good and cost effective solution is the fraudit. Depending on the organisation size and complexity it goes something like this :-
- You retain an expert fraud solicitor as an advisor to your business. The staff are advised of this and that the solicitor is retained to run checks and visits the business on an unannounced basis an unspecified number of times a year; and
- As most business fraud is in some way related to computer use, you also retain a specialist fraud computer forensic expert. Again, you ensure that the staff are notified, in a subtle way, that this person is on board and will be checking, on an ad hoc basis, for security threats, breaches or unusual activity
In short, whilst you may not enjoy spending money on a yearly accountancy audit, as a sensible business owner you know that this is necessary. The principle is the same for the fraudit and the need, I would suggest is equally there.
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