Financial fraud and theft have become a significant threat to small businesses, which typically suffer the largest median losses. Considering the differing dynamics of small businesses and larger corporations, small businesses tend to be more vulnerable to hackers and cybercriminals than larger companies due to their small business-specific security risks.
For small businesses, the hit to the bottom line is far from benign: The ACFE found that companies with less than 100 employees lose approximately $154,000 annually to fraud, and nearly half of all businesses are never able to recover any of the perpetrator’s takings.
Smaller organizations are often more vulnerable because they tend to have fewer anti-fraud controls in place. But small businesses don’t have to be victims. Here are some important tips to protect your business from common forms of fraud and cybercrime.
Guard All Accounting Documents
One of the easiest steps to take is to make sure all of your financial documents — check stock, signature equipment, invoices, bill paperwork — are secured in a locked cabinet. Likewise, be sure to use a secured mailbox for sending and receiving your bills. Never offer your business credit card to employees or companies unless you know them and can trust them.
Keep an Eye on Your Employees and Visitors
Offices can be busy places with vendors, contractors, deliverymen and employees moving in and out throughout the day. Be vigilant. You or a trusted office manager should track their movements and be on the lookout for suspicious activity.
Secure Your IT Infrastructure
It’s imperative for small business owners to invest in a firewall, as well as malware and spyware detection. Don’t forget to back up all your data each day. Should you suffer a security breach, this will make it much easier for you to recover from the event.
Dedicate a Computer to Online Financial Transactions
By using one computer for financial transactions only — and forbidding its use for Web-surfing, email or social media — you’ll make it much harder for thieves to gain access to your sensitive information. Additionally, be sure to check your banking transactions daily. This enables you to quickly spot fraudulent activity, increasing your chances of recovering lost money.
Review Your Accounting Processes
Always maintain separate accounts for payables and receivables to eliminate the payment of fraudulent invoices. Be meticulous in drafting and preparing checks and other withdrawal instruments. Maintain extra funds in a separate savings account to earn interest and keep this money safe.
Make your employees your first line of defense. Hold regular security training sessions (both on and offline) for all your employees. Help enforce what they learn by enacting policies that promote the proper use of your company’s confidential information (financial data, as well as personnel and customer information). Visit the U.S. Small Business Association’s resource site to learn more about what should be included in employee training sessions, as well as other useful information.
Get Fraud Protection
If, despite your best efforts, your company becomes a victim of fraud or cybercrime, you’ll want to recover damages. In addition to an insurance policy, take advantage of comprehensive fraud protection services to safeguard your business and your personal identity from fraud.
American businesses on average lose 5 percent of revenues to fraud a year, and instances of fraud typically last a median of 18 months before being detected. Don’t let yourself or your business become a victim. For more information about cybersecurity and steps you can take to protect against fraud and cybercrime, visit our Education Center.
The views and opinions expressed in this article are those of EZShield Inc. alone and do not necessarily reflect the opinions of any other person or entity, including specifically any person or entity affiliated with the distribution or display of this content.