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Shocking figures suggest that fraud could be costing the UK economy over £30 billion per year! When it comes to your own business you may have loyal and honest staff, but if you suspect that some kind of employee fraud is going on there are ways to discover if this is, in fact, the case. Employee fraud includes fraudulent financial reporting usually by those in a managerial position, and the more widespread misappropriation of assets. These practices can represent a significant drain on any business, and a few policy changes and procedures can make your business less susceptible to this type of fraud.
Staying aware of certain red flags and indicators of potential fraud is essential, along with strategies to prevent or deal with fraud. Some pointers to consider are:
1. Payment Authorisation and Reporting
Ask yourself if payments are authorised by at least two people to lessen the risk of invoice fraud, and if spot checks are carried out to ensure that ordered goods have been received. Spot checks in themselves send a useful message, and make employees aware that employers are vigilant. This will often make people think twice about being dishonest.
2. Employee Behaviour
Note warning signs; like over zealous employees who are first to arrive and last to leave the premises. Does anybody have a lifestyle which seems out of kilter with their salary?
3. HR Policies
Do your policies allow you to inspect emails and computers in the case of suspicion of fraud? Are you able to suspend employees with or without pay?
4. Employee Fidelity Insurance
This insurance can help with the cost of investigation and recovery of misappropriated funds or assets.
Swift action is needed in order to reduce damage to your business once employee fraud is identified. Contact John S Culwick for more advice about this and any other financial matters.
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