Running an organization, small or big, is not an easy task. Every day, there are plenty of functions that are needed to be executed. From managing the employees to assigning tasks to various teams, following up to keep a check on the budget, and preventing cash frauds in the business – the management team almost always has their hands full. Sitting at the top of the organizational hierarchy brings its own perks, but when we look at the responsibilities, handling the position becomes very overwhelming.
Besides keeping a check on how the business is spending on various areas, we are always concerned if our partners or intermediaries are not committing frauds in the middle. However, there is one thing that you might not be aware of – your employees are likely to commit more fraud than any other incumbent in your business.
This is a striking revelation made by a recent survey of Kroll Advisory Services. Their report proved that 80% of the financial frauds in the company are committed by junior employees, freelancers, and middle or senior-level employees.
The frauds committed are of several kinds. We have broadly categorized the frauds into the following:
- Submission of False Expenses
Here, an employee submits receipts of expenses that have never incurred, for example, food or any other expenses masked as business expenses. - Manipulation of the legit expenses
This occurs when the real expenses are manipulated, for instance, deliberately booking a ticket on a higher fare when the lower fare tickets are available.
Ways to Prevent the Frauds
A majority of the frauds in an organization happens because the management is unaware of them, and they are not able to measure the losses suffered by these frauds. Even if a few know about them, they are too laid back to take action.
Honestly, tackling these frauds in the business isn’t too hard. We have rounded up certain points that will help you:
#1. Implementing an expense policy
This is the easiest. While an expense policy is in place, employees will always ensure that each and every expense gets checked and thus, they will refrain from committing any such frauds. Creating and implementing such policies will also determine the strict attitude of the management towards business expenditure. Slipping through such rules will be difficult.
#2. Background checks on the employees
A few employees have the habit of committing fraud in one company and then rush towards another employment. They have a long history of such frauds, but they are too smart to mask it. When you hire a new employee, you should check the background and talk to the previous employer before handing over the appointment letter.
#3. Keep a lookout for things
It is said that a businessman should always keep his eyes open. If you try to pay attention, you will always receive some tell-tale signs that point to fraud. Whenever you feel doubtful about anything, you should take a step forward to confront the employee.
#4. Keeping and maintaining a record of all the expenses
If you are still following any antiquated or traditional muster of employees, it is time to revamp your HR systems and implement something like biometrics to your organization. The ultimate aim is to find out how many employees are regular for work, and if there are some who are often found to be absent, you must find the reason.
We believe these simple but important points should give you a heads up if there are any ongoing frauds in the organization. Rest, it will boil down to how you take it forward.
Financial fraud can be grave for businesses. Mostly, they are left untackled because the business lacks robust systems to deal with them. In this world of digitalization and automation, there are many software available that can help you deal with these frauds.
You are unaware, but these frauds are eating a sizeable revenue from your capital. It is time to fight back.
Need a quick loan for your business? For an easy application process and quick loan disbursal, contact Gromor Finance!
