Over the past few years, identity theft and fraud have become a nationwide epidemic. Although many people associate these issues on a personal level, fraud issues are also prevalent to small businesses. If you are a small business owner in ((blog.city)), you should be concerned about fraud and how you can prevent it from happening. Below, you’ll find of the best tips and tricks to help avoid your ((blog.city)) business becoming the victim of fraud.
Conduct Thorough Background Checks
One of the best ways to ensure that your ((blog.city)), ((blog.state)) business does not fall victim to fraud is by conducting extensive background checks. Not only should you run background checks on the employees you hire, but you should also do so for any contractors with which you work.
Unfortunately, many small business owners forgo background checks because it’s an added cost, and they don’t believe they have the funds available to cover the cost. However, the cost of background checks pales in comparison the cost of falling victim to fraud. When it comes to conducting background checks, you should:
- Run criminal records
- Check the individual’s references
- Verify other information on the individual’s resume
Establish A Fraud Policy Statement
Another way small business owners can prevent fraud is by establishing a policy statement. Many small business owners assume that fraud is against company policy – and typically it is. However, you need to make sure that you put this in writing so that it is clear to all employees. You should also explain this to your employees upon hiring. Your employees should not have any doubts about how seriously the company considers fraud and why this is the case.
Work with your legal counsel to amend your Operations Guide and make sure that you include something that defines clearly what fraud is, why you’re against it and some of the instances that would constitute fraud. You should also make clear the consequences were someone to commit fraud. Once you’ve crafted this definition, you’ll need all of your current employees to sign a document acknowledging that they accept and understand the fraud policy.
Protect Your Intellectual Property
When it comes to preventing fraud, many small business owners overlook intellectual property. If you have an idea, it could be protected. You should make efforts to protect things such as your company:
- Contact lists
Do you have something in your current Operations Manual protecting your intellectual property? If not, nothing is stopping an employee from obtaining your business’ thoughts and ideas, stealing them, and implementing them as his or her own. You should clearly define that intellectual property is covered under the Fraud Policy Statement.
Furthermore, you should also try to protect all of your intellectual property legally. You can do so through the United States government. Although these processes can take a while to complete, many courts accept initial filings as proof of concept. Failure to protect these ideas could cost your business hundreds of thousands of dollars.