Separate the functions of account setup and approval. The majority of small businesses that sell goods have experienced return fraud in one way or another. If you accept counterfeit money, you won’t receive any revenue from the sale. For more information, please visit patriotsoftware.com or Follow: @PatriotSoftware on Twitter. Check out The Definitive Guide to Accounts Receivable Fraud for a full look into this type of fraud. You need to document everything, keep accurate records, and look out for signs of fake injuries. Recognize types of fraud in business and learn how to protect yourself. Need an expert? ", Dallin Griffeth, Executive Director of Ethics and Education, USANA, 31 Warning Signs of Workers’ Compensation Fraud article, Essential Guide to Accounts Payable Fraud, The Definitive Guide to Accounts Receivable Fraud, The Warning Signs of Workplace Harassment and Discrimination, 11 Types of Workplace Harassment (and How to Stop Them), 6 Tips to Avoid Harassment and Discrimination Claims. Also called expense fraud, this type of fraud includes: Forging receipts; Double claiming for expenses; Submitting false reimbursement claims; Inflated expense claims . Or, employees could make up an illness or injury. Having a separate payroll account means potential fraudsters would only have access to a limited amount of funds. As a business owner, most states require that you purchase workers’ compensation. But when you’re an entrepreneur, the unexpected happens. Under former Attorney General Eric Holder’s leadership, the US Justice Department drastically increased its fight against fraud, bringing in more than $24 billion in penalties. Implement tight internal controls on accounting functions.

Fraud is prevalent in many facets of life, particularly within businesses. Conduct random audits of company accounts. Store company check stock in a secure place where only authorized individuals have access, develop a thorough method for disposing of unused checks, and match vendor and check payee lists against bank statements to discover any anomalies. Cash larceny concerns an individual blatantly stealing cash after it has already been entered into records. An employee steals or shares credit card numbers, client lists or other valuable PID to sell to other parties. Detecting the former type of billing scheme can be as easy as looking at the way a legitimate invoice from a vendor has been altered. Another common scheme involves fraud on an expense reimbursement. If you have physical copies, keep them locked in filing cabinets that only you can access. A check tampering scheme involves forging, altering or creating unauthorized checks.

Separate the functions of check preparer and check signer. There are different types of return fraud. Also known as “shrinkage,” this type of fraud commonly befalls businesses that specialize in selling products and merchandise.

Employees also commit workers’ compensation fraud when they lie about their health or work status while receiving compensation. She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery, and hosts i-Sight webinars. To avoid concealed check fraud, first implement a more complex system of check approval that involves multiple viewers and checkers.

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