According to the ACFE (Association of Certified Fraud Examiners), the estimated loss a small business bears due to fraud is 5% of their respective gross revenue. Additionally, fraud or scam frequency in private and small enterprises is 42% higher as compared to Government, large corporations, and nonprofits.
You have spent thousands, perhaps millions of dollars, establishing your business and growing it. However, a single scam can make all your efforts, resources, and time invested go into a drain. It can further affect the reputation and goodwill of the organization, affecting the trust of customers and stakeholders.
That’s why it is critical that you take every necessary measure to always stay one step ahead of the scammers and protect your business. Here’s how:
Understand Common Tactics Of Fraud
Staying up-to-date with scamming trends and methods is no longer an option; rather, it’s necessary. There are numerous ways scammers or imposters can affect your business operations. For instance,
- Financial fraud using phony invoices that includes general expenses or unordered office supplies.
- Marketing or click fraud leads to a high number of website traffic or CTR (click-through rate) but no actual sales.
- Tech scams using pop-up advertisements and messages from renowned brands and businesses.
Learning about such trickery methods will help you safeguard your enterprise and formulate an effective action plan.
Use Technology For Your Defense
After learning about different types of scams, you need to formulate an effective strategy. Here, you can use the technology to build a solid defense and detect any kind of suspicious activity. Let’s take the scenario of click fraud for better understanding.
Click fraud can severely affect your marketing budget as you are likely to pay for every pay-per-click interaction while there is minimal or no progress in sales. In such circumstances, you can use click fraud prevention software to detect false clicks and safeguard your money. Believe it or not, installing the software will be relatively affordable compared to the huge financial burden you might have to bear.
Always Verify Invoices and Payments
Another measure that you should take is verifying invoices and payments before making payments. Cross-check the products or services mentioned on the invoice and only pay when the order is confirmed or delivered. Instruct your employees and staff to do the same.
It would also be wise to limit the number of people who handle accounting and invoices. It will help lower the risk of making a costly mistake significantly. In case you are using digital invoices, make sure to review them as well.
Don’t Forget To Report The Incident.
Finally, if your business experiences any type of scam or fraud or you have a suspicion, report the same to authorities. You must also hire an attorney who can help safeguard you. Reporting the incident will halt the activities of the imposter and increase their chance of getting detained or arrested.
The Bottom Line
Business fraud or scams are rising at a surprising rate. Therefore, you must take necessary action to protect your organization. Keeping up with scamming methods and using the latest technology can help accomplish this aim. It will also ensure that your every business decision is well-thought, leading to company growth.