Fraud is Rampant in all Corporations: Keep your SME in Check


A popular misconception when it comes to fraud is that it is limited to big corporations and enterprises.This misconception is probably due to the fact that we learn about fraud through Hollywood as well as big media stories. The fact of the matter is, even in a small to medium enterprise (SME), fraud is definitely still a threat. Fraud is also often more devastating for small businesses because these enterprises often don’t have the capital to deal with big losses and litigation.

Small to medium enterprise owners certainly require financial investigations and fraud investigation services to ensure that all their assets are where they should be.There are things to look out for to prevent or identify fraud in your small business.Gaining this knowledge could save you a lot of time, money and effort in the long run.

Why a Small Business Can be More Vulnerable to Fraud

Small businesses are often more vulnerable to fraud due to the likelihood of entrusting a single person to handle multiple tasks; such as managing the records, books, and even bank accounts.This level of trust and responsibility could give the individual easy access to commit all types of fraud. Small businesses also often lack strict procedures and policies, which could open doors for fraudulent activities too.

Types of Fraud

The types of fraud that occur within small businesses does not differ from those at larger enterprises. However, small businesses can be more susceptible to fraud, so it is important to be aware of the risks which could arise:

  • Assets fraud: fraud relating to theft of assets, expenses theft or compensation fraud.
  • Payroll and accounting fraud: examples include embezzlement, ghost employees and advance fraud.
  • Data fraud: this includes trade secret theft or other sensitive data theft.
  • Billing schemes: this can be when an employee creates false payments to themselves or charges suppliers for more money than agreed – overbilling.

Preventing Fraud in Your Small Business

There are a few precautions you can take to prevent fraud, but you will also need to have an expert fraud investigation services consultant on your contact list should you identify any red flags. Work towards conducting regular financial investigations and put together proper procedures for employees to follow to ensure that everything is recorded. Getting good insurance and fraud investigator practices in place is also important to protect yourself should something go wrong.

Specialists such as D & K Management Consultants offer plenty of expert services from fraud investigation services to insurance fraud investigations and financial investigations.This could be your way of identifying fraud in your SME.