Small businesses are often more susceptible to fraud than larger companies. Here are eight strategies to safeguard your business.
Companies with fewer than 100 employees annually lose a median of $155,000 because of fraud. It turns out that small businesses are more exposed to fraud than are their larger kin. Credit card abuse is a major weak spot, but by no means the only one.
Below are eight ways to protect your small business from fraud and cybercrime:
Check your employees
Hiring honest people is essential if you want to reduce fraud, especially for staff members that handle cash or high-value inventory, have spending authority, or can access private financial/customer data. To stay compliant with legal privacy rules, consider using a private screening firm. Always verify resumes and do web searches on job candidates.
Protect your financial accounts
Credit cards and bank accounts are frequent targets of fraud. When starting your own business, separate personal cards and accounts from business ones – this makes it a little harder for fraudsters to steal all your money. It also helps you fill out your tax returns accurately. Secure your credit cards, and don’t hand them over to employees unless you know them well. Go paperless and make payments via online bill pay. Get a secure mailbox for receiving and sending bills. Finally, review your online banking activity daily.
Protect your computers
Invest in software that makes you more secure: anti-malware, anti-virus, and spyware protection programs. Backup your data onto the cloud to guard against cyber blackmail, and automate your backups. Explore server virtualization, which eases disaster recovery. Encrypt all your data and use solid passwords that you keep secure.
Consider a banking-only computer
By designating one computer exclusively for all your online banking, you avoid threats from email, social media, and web-surfing, at least on this one computer. Although mobile banking seems nifty, best to avoid it if you are concerned about fraud.
Get serious about passwords
Having a password policy makes a lot of sense, even though it takes some extra work. First, have all business passwords expire every 60 to 90 days. This lowers the risk of password theft. Set password standards, including length and use of special characters. Use unique passwords for different systems and accounts.
Train your staff
Make your employees your allies in the fight against fraud. Invest in regular training sessions that teach your staff to detect and prevent security threats that can lead to fraud. It’s important to train employees to be alert to phishing fraud, in which phony emails look like they came from management.
If you delegate check-writing or online payment authority, divide that authority between two, unrelated employees. This helps to prevent internal fraud in areas such as purchasing. Set spending limits that demand your approval for sufficiently large expenditures. It’s a good idea to stay away from paper checks altogether since they are inherently less safe.
Despite your best efforts, fraud and cybercrime can occur. You can protect yourself by purchasing an insurance policy covering losses from fraud and crime. Use credit cards with built-in insurance that provides $0 exposure to fraud.
Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article.
Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.
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