Small businesses are more vulnerable to theft, bad debts and fraud than bigger corporations. Indeed, it is your dream business that will be ruined by a simple fraud, theft as well as debts that your trusted customers have not paid.
But before we look at how business can avoid these evils, let us see what theft fraud and debts mean. Without going into details, theft can occur in terms of stock, cash, time and machinery fraud, which would mean fake purchases, supplies, overrated bills, quotations, while debts are those that your customers owe you.
So, what do you need to do? Well, you do not need strict measures. Just be vigilant.
Ensure there are checks and balances in your operations. Try by all means to see that you can closely monitor what is going through your business, understanding transactions, keeping in touch with your customers, as well as getting feedback from your suppliers.
For instance, a phone call to your customers thanking them for paying in time, or reminding them of their obligations to pay before the deadline would help you unearth some of the fraud.
Again, try to alternate your staff because changing roles will help you to track some of the fishy deals in your business and the most magical thing is always to ensure that your staff get leave. Surprisingly, some of your clients may express delight when a tainted staff member is n leave.
Have a clear separation of duties. For example, don’t let someone in charge of purchases be in charge of cash or one to receipt them.
Also, ensure that there is clear harmonisation of your book of accounts, bank statements, cash books and all other transactions so that it is easier for you to follow up on all transactions in your business. A clear procedure in signing checks, issuing authority on purchases or payments would also help minimise fraud and theft.
If you are using ICT, ensure that your data is secured with passwords and only accessible by authorised persons.
Most importantly, be transparent because when you steal from your business or don’t follow procedures you set up in your business, it will encourage other people to do so. Be an example, by discouraging the purchase of personal items through your business, and discourage your staff from buying things at your workplace as this would tempt them to use the business’ money in anticipation of refunding it.
Be conscious of reduced flow of money in your business and the declining list of debtors as this may mean money paid by these debtors would be transferred to a staff account.
Restrain your staff from giving out debts to clients or a reduction in price. Ensure that you are always first consulted to help in the day to day operations of your business.
Encourage a culture of daily reports, do regular audits and ensure financial comments on those reports as this would expose the mess in your business.
Generally, all these measures would help shield your business from such acts and help you attain your goals and help ensure that you enjoy your business as part of your daily life.