Many Small Businesses have a culture built on “trust” which gives the owners a false sense of security instead of enhancing security measures through clear financial policies, rules and procedures.
Merely acquiring a good Accounting package for you business can not prevent fraud on the part of your Accountant or Book-keeper without taking necessary steps and effort to prevent any fraudulent activities.
According to a latest KPMG fraud Barometer report, The UK Accounting Industry was badly affected by fraud in the last year with £ 1.3bn of fraud committed in 2009 and thirty three cases relating to Accounting and book-keeping fraud worth £ 44m went to court.
The report further found that many of the people committing the fraud had worked for their victims for years and were very trusted by their employers. The report even gave an example of an Accountant in a property management company who stole more than £350,000 by transferring money from clients into his own name.
No matter how small your business is, accounting fraud is on the increase and your Business could be at risk. According to Mr Patel of KPMG “what we see is only the top of the iceberg. Fraudsters will only get more sophisticated.”
Here are some of the steps you can take to prevent fraud in your accounting records.
1. According to the KPMG report, “trust easily leads to the relaxing of controls and oversight which enables thieves to succeed.” So never manage your small business based on mutual trust but develop security systems based on procedures, rules and financial policies.
2. Vigorously screen your potential Accountants, book keeping staff and carry out back ground checks. Knowing who you employ to handle your accounts and the extent of any risk they pose to the organisation is a key line in fraud defence.
There are also a number of various retail loss prevention software which can be integrated with your exiting accounts system to perform background checks and prevent fraud. Simply seek Expert advice on the type of controls to put in place if you can’t do it by yourself.
