Top 4 Small Business Security Risks To Avoid

Top 4 Small Business Security Risks To Avoid

The Association of Certified Fraud Examiners (ACFE)’s 2020 report indicates that businesses lost about $125,000 on average due to fraud. Every company is susceptible to fraud due to the many forms these scams can take. As such, it is your responsibility as a small business owner to protect your organization from fraud by having enough security measures in place. If you wish to learn more about protecting your small business from fraud, take a look at the points below.

  1. Poor fraud management systems

Your business needs a working system to safeguard it from scams, so consider implementing an effective fraud management system for this. For instance, if your enterprise accepts online payments, an identity theft protection system is worth considering to protect your customers’ details and other essential documents, making it harder for hackers to obtain. Similarly, you can invest in identity verification software to ensure that your vendors, customers, and other users are who they claim to be online so your business doesn’t fall victim to fraud. Finally, consider establishing an enterprise fraud management system for real-time screening of all transactions across multiple company accounts, processes, users, and channels to identify and stop fraud.

  1. Vague and inaccurate business records

It isn’t uncommon to spread yourself thin as a modern-day small business owner to keep your company running efficiently. However, prioritize accurate record-keeping since this can go a long way to shield your enterprise from fraudulent activities. For instance, detailed accounting records can help you track how much revenue comes in and goes out, as well as what you pay to contractors for work they complete. Similarly, keeping outstanding inventory records will minimize employee theft, resulting in hefty losses for your company.

  1. Failure to check employee backgrounds

Employee fraud is more widespread than you think in the United States and beyond. This fraud occurs anytime a worker knowingly deceives, lies, or steals from your business to obtain some form of compensation. As per the US Department of Commerce, employee theft alone is responsible for one-third of all business bankruptcies. As such, conducting thorough background checks when hiring workers is crucial to ensure that you know who you are working with. These pre-employment background checks are essential for workers who will handle cash, valuable merchandise, or access financial or customer data. However, remember that your background checks must follow specific guidelines and not violate any employment laws. For this, you can hire a reputable service specializing in pre-employment screening to ensure that you remain compliant with the law.

  1. Lack of employee awareness training

Companies with fraud awareness training are reportedly 56% more likely to prevent fraud, so it is crucial to educate your staff. Employee training is essential because your workers are your first line of defense against fraud despite being your most significant point of vulnerability. Therefore, hold frequent training sessions on basic online and offline security threats and prevention measures for new hires and old employees. In addition, you can enforce this training by instituting policies that guide your staff on the correct use and handling of confidential company information.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.