Friday, August 1, 2008

What I Still Think Is The Best Fraud Defense For A Small Business

One of the first frauds I ever investigated would probably never have happened if the owners looked at the monthly bank statements. Then they would have seen the checks going out to unauthorized vendors. Like the bookkeeper's credit card company. And her cable television bill. And checks to various fraternal organizations she was a part of.

If they had reviewed the bank statement they wouldn't have lost $125,000 to her over 5 years. And it isn't like it happened evenly over the 5 years. Like many frauds, she started small, and built up as she knew she could get away with it.

The naysayer in the crowd will point out how many banks won't send cancelled checks back. That's true. But copies are still available, often online, which will serve the same purpose.

And if you want to take things one level further - have the bank statements sent to the owner's house. That way they can't be altered by the fraudster.

The simple things can make all the difference.

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