Businesses have enough to worry about with competition from outside sources, so fraud that takes place within a company can be viewed as an unnecessary headache.
Not only do businesses have to be on their guard to constantly fend off external threats from their competitors, but they must also be on the lookout for signs that their employees may be trying to bring the company down from within for personal gain.
Whether they’re disgruntled, selfish or just plain bored, employees who commit fraud may be able to get away with their crimes for a long time. That’s because they can hide in plain sight. In many cases, employees committing fraud are the ones responsible for gatekeeping the sensitive data and systems they exploit.
There are many ways employees can commit fraud and hurt a company from the inside. One of the most common methods is when employees manipulate company records or orders to funnel money or goods to themselves. These employees might alter payroll records to get credit for hours they didn’t work; doctor accounts payable to duplicate payments to vendors; or simply take physical assets home with them at the end of the day.
Another common type of fraud includes intellectual property fraud, in which employees may try to steal sensitive information or pass counterfeit items as legitimate.
Corruption can also be a big problem, in which employees may try to manipulate relationships with vendors to gain benefits in exchange for preferential treatment.
Although the effects of fraud can be devastating to a business, there are steps businesses can take to protect themselves and prevent prevalent types of fraud that could take place within their companies. For example, businesses can inoculate themselves against fraud by creating an internal culture that concentrates on employee satisfaction and teamwork, which can prevent the feelings of disgruntlement that push many to commit fraud in the first place. Dividing important tasks such as managing payrolls and accounts payable among employees also reduces the chances that an employee will try to get away with something. Above all, employers need to establish clear-cut expectations for employee behavior and ensure that they are clearly communicated. Simply by letting employees know that fraud is not tolerated, employers can send a powerful message.
The accompanying guide contains more details about widespread forms of fraud and some of the steps employers can take to combat them. Your business has enough to worry about with your competition, so don’t let internal threats tear your business apart from the inside.