Concise Accountancy

Accountants and Registered Auditors

Business finance

Prevent fraud

Prevent fraud is critical in any business operation. Business regardless of its size is vulnerable to numerous types of fraud and all these have a big financial impact on your business.

In any case, fraud can occur when there is a lack of control in place to prevent or deter it from happening. Fraud can be anything from cash misappropriation to falsification of accounting transactions including creating dummy customers for money laundering purposes.

Business owners are advised to take reasonable steps to prevent fraud. There are ways to protect your business against fraud. This includes the following:

Corporate identity theft

If your business is a limited company, keep safe of your authentication code. This code is the electronic equivalent of your company director and secretary’s signatories. You would require this code when comes to filing your confirmation statement and company accounts.

Screen Employees

You must make all necessary background checks and follow up on references, especially for sensitive positions in your business such as Finance Director who will be primarily dealing with your company financial affairs.

Train Staff

Ensure your staff are adequately trained in your standard procedures and know what to do if there are any deviations. Your staff should know who to report to when they noted or suspected fraud has occurred.

Implement Whistleblowing Procedures

Encourage, don’t punish, whistleblowers, but be aware of the possibility of staff vendettas. Care must be taken when dealing with whistleblowers.

Use The Courts When Necessary

If your company has been defrauded by an outsider you may seek a civil action first. You can obtain a court order which enables assets to be traced and frozen.


As an alternative to the courts, you may negotiate with the individuals involved; try asking for any fraudulently obtained money to be repaid.

Use Technology And Computers

There are various IT technological options for minimizing fraud, for instance, ability to recover deleted information from PCs, use of PIN numbers, and have layers of authorization access using passwords for different grade of employees within the company.

Stay Alert

Be aware of the possibility of fraud at all times and especially if things are not as normal as they should be, for instance, suppliers’ bills on the increase or slow collection of debts or unduly high stock levels and so on.

Two Signatories For Cheque

It would be wise to always have two signatories for signing a cheque for a certain amount of payout, and for authorizing payments via online bank accounts. This can be paid more than £20,000 require two signatories or approval of two finance managers or director.

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