Fraud is a crime that affects or at the very least could potentially affect, virtually every business on an international level. Nothing you could do could absolutely eliminate the chance that your company would become a victim to fraudulent activity. But by taking these simple steps you could go quite a distance towards business fraud prevention and possibly even early detection of your company's own potential for being a victim of fraud. So what are some of the things that businesses could be doing to protect themselves?

A key step in business fraud prevention is internal controls. Internal controls refers to the procedures, systems and personnel that are putting in place to ensure that company information is secure and controlled. These controls need to be effective at preventing unauthorized access to company data, and the results of such unauthorized access should be recorded and investigated promptly. By making sure that all employees are aware of their responsibilities to safeguard company confidential data and by requiring them to report suspicious activity to their supervisors, you can significantly reduce the risk of employees performing unauthorized acts that can lead to fraudulent activities on your company's behalf.

The second major step in business information protection and fraud prevention is to perform routine monitoring of financial statements. Financial statements are basically accounts receivable and accounts payable. By monitoring these accounts regularly, business owners can detect any unusual trend or activity, which may indicate that fraudulent activities have occurred or may be about to occur. Business fraud happens when a third party obtains confidential business information either for its own use or to obtain a loan, or for another purpose. Financial statements provide information regarding the assets, liabilities, and revenue of a business.

While performing regular accounting, business owners should also engage in research related to the prevention of fraud. This includes reviewing accounting reports for indicators of fraud, checking credit card statements, and making sure that bank statements reflect the correct account balances. Business owners can also prevent fraud through the creation and maintenance of accurate financial statements. By maintaining these statements, business owners can determine whether there has been any fraudulent activities performed against their company.

Another important step in business fraud prevention is to thoroughly check the credit history of the business owner before granting any loans or other forms of credit. Businesses should also closely monitor the bank accounts of their employees. Employees can open accounts anywhere in the world, so a business owner should check the credit report of every employee, and should perform a review of the bank statements of the bank accounts of these employees at least once each month. Regular checking of business activity and accounts in this manner can help detect fraudulent activities that could lead to employee theft.

Every business should implement a quality monitoring program to detect fraud. The program should include periodic checks of its financial statements, employee credit reports, and employee payrolls to make certain that all transactions and balances are reported accurately. Procedures should be implemented to try to catch employees who may use their position to obtain illicit financial benefits. For example, it is possible for an employee who receives a substantial tip to use the tips to buy a business owned property that they can sell to generate an additional income. Accounting methods that do not account for these tips can cause a business to fail the tests of auditors.

The third type of fraud that small businesses need to be concerned about is credit card fraud. Almost all small businesses make use of credit cards, which makes them targets for anyone that can obtain access to a business's accounts. Some thieves have been known to misuse business credit cards to purchase items that they cannot afford. Businesses need to closely monitor all purchases and transactions made with credit cards to detect suspicious activity. In addition, small businesses need to work with local law enforcement agencies to combat this kind of fraud.

The fourth type of fraudulent transaction that small businesses need to be concerned about is wage theft by an employee or another employee of the business. Wage theft by an employee occurs when another employee receives an excessive amount of money from the company. Wage theft by another employee typically occurs when an employee receives an excess amount of pay for things that he or she did not perform. By having an employee's full pay stubs available, a business can easily determine if an employee has been taking advantage of the pay they deserve.