Fraud a clear and present danger

One of the lessons of the recent economic downturn was the need for all businesses and organisations to remain alert to the potential for fraud.

Entrepreneurial owners of SME’s are a prime target for fraud as overseeing finances doesn’t always come naturally to them. If a founder is focusing mainly on the product or service being sold, and only minimally on administration, it leaves a business vulnerable to fraud.

In smaller organisations fraud can take many forms e.g. invoice scams, to suppliers providing kickbacks for inflated purchases, theft of stock, fictitious expenses etc.

A growing threat comes in the form of cyber-crime.

Some 82 per cent of Britain’s 4.9million small and medium-sized businesses believe they are not a potential target of cyber-attacks from fraudsters because they are too small or don’t have anything worth stealing, according to a study by Kaspersky Lab.

However Federation of Small Business found 41 per cent of small firms - in a sample of 1,105 - were hit by cybercrime in 2013.

One in ten were the victim of online fraud and one in five affected by a computer virus.

For larger organisations the potential for various fraud activities exists but the numbers involved are far greater.

It is vital that all organisations have systems in place to monitor all of the company’s finances and commitments in a clear and concise format.

Simple but effective systems of checks and balances can go a long way to limiting if not removing the risks.

It is all but impossible to ensure that any organisation is “fraud proof” but by establishing robust and efficient systems some measures of comfort can be introduced.