In business, there’s no escaping risk, especially when the fraud comes from trusted sources.

The good news is that you can mitigate the risk by staying informed and taking preemptive action. In this article, we’ll cover the types of fraud that small business owners should watch out for, plus smart tips for protecting your enterprise.

Three things to understand about fraud:

• Fraud Can Happen From the Inside
  It only takes one bad actor to wreak havoc on your small business. Dishonest employees may misuse business credit cards or submit false or inflated reimbursement claims. Employees with access to your payroll system may also manipulate records. Remember, proprietary business and client information can be as valuable as tangible assets.
• Fraud Can Come From Trusted Vendors
  Vendor relationships are essential to most small businesses, but without sufficient oversight, they can become a gateway to fraud. Examples include phony or duplicate invoices for goods you’ve already paid for, bid rigging and kickbacks to purchasing agents, and even check tampering and forgery.
• Fraud Can Happen Through Social Media
  Social engineering occurs when a scammer uses a combination of social and technical skills to obtain money or information. It includes scam emails (phishing), phone calls (vishing), and text messages (smishing), all of which share the same basic goal: getting you to reveal sensitive data.

Three ways your business can fight fraud:

• Build a Culture of Accountability
  Security starts with a strong foundation of organizational policies and a culture that values transparency and accountability. No single employee should have unlimited access to accounting software, bank accounts, or HR records. Instead, set clear access boundaries, conduct regular security audits, and educate your team on how to respond to suspicious incidents.
• Establish Strong Security Measures
  This begins with regularly establishing strong passwords and multifactor authentication (using another form of ID verification). For enhanced protection, consider strong firewalls to monitor incoming and outgoing network traffic and defend against hackers, viruses, and other threats. And, of course, avoid accessing sensitive or proprietary information over public Wi-Fi networks.
• Consider Security Insurance Coverage
  Decisions about insurance always involve weighing upfront costs against potential losses. As you consider your options, consider commercial crime coverage and cyber liability insurance for external threats, and fidelity bonds to protect against employee fraud.

Need to safeguard your enterprise? Contact us for more tips on how to keep your hard-earned assets secure.