If you’re an accounting professional, and you’re thinking about making your mark in the online world, you should know that there are many ways in which this amazing open environment can lead to all sorts of troubles. According to Business Fraud Prevention, businesses lose up to five percent of their annual gross revenue due to different types of fraud.
Moreover, the report states that small businesses and startups are the main targets of financial scams, while large corporate entities are less likely to suffer a similar fate. The risk of financial swindles is even greater for those who focus their operations on the internet, which is nowadays an extremely popular method of doing business.
We did some research and came up with these practical pieces of advice that should help you avoid falling victim to financial fraud as an accountant.
Checking a company background
When a potential partner or a client approach, the first order of business is checking for their credentials. This goes for both online and offline communication. However, checking the company address, phone number, website, and other contact information should not be the end of your checkup process because these things are easy to fake.
It’s up to accounting to provide vital decision-making information, checking crucial business data is one of that information. With a proper company background checkup, you could prevent loss of money, and legal issues, and help other people keep their businesses afloat.
Another important aspect of inquiry should be the list of former partners and companies that did business with the company that you are considering working with. If there’s no evidence of past work, you should plan your future steps carefully. If you’re lucky, you might have been approached with a new business that’s yet to grow its portfolio, but there’s always a chance that the list of previous partners and clients is empty because there were never any.
Keep your monetary flow under control
Although we mostly fear that the risk of fraud comes from the outside, it’s important to understand that many financial fraud cases occur on the inside of a company. Therefore, you should focus your energy on internal elements that control the flow of money.
Regular books audit helps notice any irregularities in cash payments, refunds, product returns, inventory management, or other accounting functions.
Inform yourself about all the available and popular methods of payment, so you could keep track of all the doors that money can go through. Moreover, organize a list of your teammates that handle cash payments or refunds, and help them get appropriate safety training so they too could avoid scams. This also allows you to hold those people accountable in case they make fraudulent payments because they had the necessary training to avoid such situations.
People who check the legitimacy of payments should also become an important aspect of your concerns. In many cases, company employees are those responsible for financial fraud. Make sure you have trustworthy people on your team that won’t take advantage of your confidence. Some people avoid these types of troubles by hiring accounting professionals with a good background, usually through word of mouth.
Practice safe internet usage
The list of ways in which someone could exploit our lack of concentration or technical inexperience is all but limitless. Everything from malicious emails to websites that are built to capture your banking data is out there and the only way to prevent getting scammed is to be cautious while performing professional activities online. More than banking data, all the essential business files and data can be lost.
If you are about to make a payment for a good or service through a website, make sure it runs under an HTTPS certificate because this means any information you disclose stays safe. Moreover, if you get a suspicious email and parts of that offer include sending money or your banking data it’s best to avoid complying with any of the demands in this email.
Downloading unlicensed software for work is another way to let third-party into your system and risk losing vital business information and money. Shady software solutions could hide malware that steals your passwords or corrupts other software. It’s not unusual for criminals to send out viruses that encrypt all data so they could ask for ransom later. Backing up business essentials is one of the best ways to avoid paying ransom to retrieve stolen information.
Control and focus are your main weapons in defense against all sorts of financial swindlers that are out to get you. This doesn’t mean that you should treat everyone as a potential threat, you don’t want to skip a good business opportunity because of your lack of trust. Keep your hands open for everyone just make sure their hands are just as open as yours and there’s nothing they hide behind their backs.