Is someone stealing from your business?

According to the AFCE, businesses are losing 5% of their revenue to fraud every year – and those are just the cases that are being detected.

Luckily, there's plenty you can do. We've put together a few of the most common scams that businesses suffer from, along with a few tips to help you prevent and detect them.

No one likes to suspect their own customers, employees and suppliers. But with a little diligence and attention – and a little help from some powerful software –you might be able to keep some of the world's more unscrupulous characters away from your business.

The Billing Scheme

What's the scam?

Essentially, a billing scheme is when an employee creates a false invoice and a false bank account to receive the payment of the invoice.

The invoice is submitted, the business pays the invoice, and the employee collects the cash – usually through a bank account they've created specifically for that purpose.

Here's where things get particularly devious.

No sensible business owner blindly pays every unsolicited invoice they receive. So the fraudster will usually create a bank account in a name that's as close as possible to one of your genuine suppliers.

For example: you might be used to paying invoices from "SmartWare Ltd" every month. When a new invoice with the same layout and logo arrives that's payable to "SmartWare UK", your finance team might not notice any difference, and unknowingly pay the false invoice.

The fraudster collects the money, and your business has just processed a "legitimate" expense – so you don't even realise you've been a victim of fraud.
What can be done?

The first and most basic step is to use pre-approved vendor lists and contact details. Xero, for example, can import all of your supplier and customer contact details, so your accounting software is already linked to your genuine suppliers – reducing the potential for paying an unknown entity.

The next step is to regularly compare your expenses against your budgets and forecasts. If you've been the vicitim of a billing scheme, you should be able to see where you've "bought" more services from a particular supplier than you originally planned or intended. Once you've detected a discrepancy, you can start to dig into the invoices themselves, looking for suspicious names, addresses or invoice numbers.

The Point of Sale Skim

What's the scam?

If you're running a retail business, this could be one of the most common ways to suffer from theft – especially if your business relies on a high number of small transactions.

When a dishonest employee is given free reign over a till, there are plenty of different ways they can commit fraud. They might apply discounts and pocket the difference in cash, they might abuse the "no sale" function to open the drawer – or they might simply complete a sale with a customer, but never actually ring the transaction through on the till.

However they do it, the result is the same: your business's cash and stock are disappearing, and the costs are passed on to you.

What can be done?

Aside from the traditional methods of video surveillance and physical supervision, you'll need access to better data if you want to detect and prevent these kinds of scams.

An all-in-one POS and inventory system like Cin7, for example, can help you to keep track of your till transactions and your stock levels at the same time. With unique logins for each member of staff, you'll be able to see exactly who's doing what, and start to spot suspicious activity – excessive discounting and refunds, or repeated "no sales" drawer openings.

Once you've identified the suspicious transactions, you'll be able to go back through your CCTV footage to the exact time they took place, and hopefully catch a fraudster in the act.

The False Expenses Claim

What's the scam?

This one is quite simple – and it can be so hard to detect that it probably happens a lot more than you might expect.

Put simply, it's when an employee abuses their ability to claim business expenses. That could mean taking a friend out for lunch and calling it a business meeting, or it could mean getting a refund for a legitimate business purchase, and still claiming it as an expense afterwards. In some cases, it could mean using an accomplice in another business to get a fraudulent receipt for a purchase that never actually occurred.

These fraudulent reimbursements may only be small sums, but the scam can be repeated several times a week for months or years, and there could easily be several employees claiming false expenses at once.

That means that these small sums can really add up. In fact, expense fraud is estimated to cost employers in the US as much as $2.8 billion every year.

What can be done?

Just like the false invoices used in the billing scheme, scrutiny is the best weapon against fraudulent expense claims.

The first step is to make sure the expenses of individual employees are checked and approved by their line manager – or at least someone who understands the employee's duties enough to spot something suspicious.

The next step is to make it as easy as possible for your management team to see any questionable claims. An app like, Expensify for example, can apply your specific company policies to any submitted claims, automatically pulling up any violations for a review before approval. It can also help to stop any over-inflated claims by using set rates and limits for different expenses.

Finally, you can periodically compare your projected budget for expenses against your actual costs. If your employees' expenses are starting to outstrip your forecast, it might be time to start sifting through the historic receipts to look for clues.

So what's the next step?

These are just a few of the most common scams that your business might have to face.

And while there are plenty of different ways to approach their detection and prevention, the best way to tackle fraud is with better data and useful analytics.

If you'd like to get the software and apps that can protect your business and reduce your losses, get in touch and we'll show you how we can help.


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