Business News

How To Defend Your Small Enterprise From Fraud

Here are three steps you can take to increase your security and keep scammers at bay.

Entrepreneur New Years Leader

Get inspiration from the business resources in our guide and help you meet your goals in 2021.

14, 2021

3 min read

The opinions expressed by the entrepreneur's contributors are their own.

As a small business owner, there are many roles that you have to perform to keep your business running efficiently. One of these is to make sure that you have adequate security measures in place to protect organizational and employee data from fraudulent scams. Unfortunately, online scams are becoming more common: As of 2018, 82% of companies said they were affected by fraud. While these results indicated that large companies were at particularly high risk, small companies were not exempt from these attacks. This is why protecting your small business from fraud is more important than ever. Here are three steps you can take to increase your security and keep scammers at bay.

Educate yourself

Knowledge is power. With that in mind, the first step in protecting your small business from fraud is to learn about the types of fraud that can target your business. Some of the most common small business fraud scenarios are payroll fraud, cash theft, online banking, and false invoicing. It is also important to examine the dire consequences such programs can have on your small business. Fraudulent activity can destroy your business in many ways. Often times, financial losses are substantial, partner and customer confidence in your company is likely to decrease, and your company's overall reputation could be seriously affected.

Related: I Go To Jail For SBA Loan Fraud: 7 Things You Should Know While Taking COVID-19 Aid Funds

Train your employees

If you want to protect your company from fraud, your employees need to be informed and involved in this process. Make sure you receive regular training on common security threats (online and offline) as well as prevention techniques that can be implemented.
Make sure that all employees (both new and experienced) understand the company's policies on the use and handling of sensitive data such as financial data, employee information, and customer information. Otherwise, there could be costly knowledge gaps among employees. For example, if an employee doesn't know what a phishing scam looks like, the more likely they'll fall for you and put sensitive data at risk.

Integrate a fraud management system

Ultimately, setting up an effective business fraud management system is the best thing you can do to keep your small business safe from fraud. Enterprise Fraud Management (EFM) refers to the real-time review of transaction activities across multiple users, accounts, processes and channels to ultimately identify and prevent fraud within an organization.

There are several criteria to consider when choosing a fraud management system for your company. Look for a program that offers seamless integration, real-time analysis and results and that fits your budget.

Related: Has There Been $ 1 Billion in PPP Scam?

At a time when online fraud is becoming increasingly common, defending your company's data must be a top priority. By educating yourself and your employees about the types of fraud, as well as preventive and protective measures, you will be equipped with the knowledge needed to strengthen your overall security. By integrating an effective fraud management system, you can also be sure that your data is protected from fraudsters.

Related Articles