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Internal fraud – how to avoid becoming just another statistic
Internal fraud is on the increase and it could be costing your business huge amounts of money. Recorded frauds by UK employees rose by 18 per cent in 2014 to 751 confirmed cases, compared to 638 in 2013.* A shocking seventeen per cent of reported cases occurred in the accounting department.**
So how do you go about safeguarding your business from internal fraud, especially accounting fraud?
It’s vital to thoroughly review your financial processes. Are they leaving the company wide open to fraud? Question the roles of each member of the accounting team – does any one person have too much power over payment authorisation? Perhaps the individual who signs off the purchase order also happens to authorise the invoice and goods received note.
How manually-intensive are your processes? The more paper you rely on, the more likely you are to be opening yourself up to internal fraud. With a paper-based accounts payable (AP) function, invoices can be easily ‘altered’ or ‘lost’. Suspicious invoices are also difficult to detect. It is therefore key to have the right technologies in place to help prevent and detect fraudulent activities.
Electronic document management (EDM) is a ‘no brainer’ in the battle against insider fraud as it also streamlines the AP function. All invoices arriving into the organisation are imaged and archived, putting an end to ‘lost’ and ‘tweaked’ invoices. Suspicious invoices can no longer ‘slip through the net’ and there is a clear audit trail showing who has approved what and when, making it hard for unscrupulous behaviour to go undetected.
No company is safe from internal fraud. An employee who is defrauding your company is unlikely to look either dodgy or desperate. In fact, the person who is unscrupulously helping themselves to your business’ hard earned cash may well be respected and liked. They just happen to be cunning and greedy risk takers as well! The bottom line is that you need to be smart and protect your business with the right systems and processes before you become just another statistic!
Why not download our ‘Getting Tough on Internal Crime’ White Paper to find out more: http://www.wearev1.com/collateral/pdfs/register.php?doc=v1-staff-fraud.pdf
*Cifas Employee Fraudscape Report (23 June 2015) https://www.cifas.org.uk/employee_fraudreport_junefifteen
Internal fraud – how to avoid becoming just another statistic by Catherine Murphy