Let’s face it; external threats of fraud are getting worse, and some organizations don’t have a clue what to do about it!
With the growing influence of the internet and dependency on employees in the modern-day workplace, theft of confidential data and trade secrets is more common. Monitoring employee activities and tracking their performance and conduct is easy. But monitoring day-to-day external operations is more difficult because they are multifaceted. Getting in control of your core business operations, whether financial or managerial, is critical to your long-term success. Perhaps it’s the first thing that determines your company’s profitability and productivity. Guarding against external threats of fraud can help identify and protect your company from fraud, vandalism, libel, hacking, and other inappropriate behavior or misconduct.
Small Organizations Are Vulnerable to External Threats of Fraud!
According to a survey, more than half of the corporate houses around the globe or two-third of companies have experienced and suffered one or more instances of fraud. Surprisingly, the US tops the list of the most severe level financial crimes ever recorded in a corporate world. This indicates that fraud is an ongoing and most widespread activity that costs businesses billions of dollars each year. Small and mid-sized businesses are more vulnerable to external threats of fraud, as they usually lack resources and an adequate level of checks and balances. As per the ACFE Report to the nations, the typical organization loses a significant 5% annual revenue and profit due to occupational fraud. Also, the cases of fraud are far less likely to be committed by a team of individuals and more likely to be committed by a single individual or in an individual capacity.
External Threats of Fraud Possess Risk That Impacts Company Profitability
The need to have a secure and reliable way to manage your company’s finances is essential for putting your business in the right direction and expecting to have long-term growth and success. In a digital world full of fraudsters, computer hackers, data breaches, and spies, you and your company can expect to get affected in one form or another as identity thieves can easily get a hold on your company’s sensitive data and secrets. This makes it clear that external threats of fraud can significantly hurt companies making them get out of the competitive business race. So, having proper checks and balance systems and mechanisms in place can help you reduce costly errors or mistakes.
Types of External Threats of Frauds
External fraud can cause serious damage to your bottom line. It commonly involves your customers and external parties, such as your vendors, banks, etc. Some of the most common types of frauds include vendor and telemarketing fraud or scam, corporate espionage, check and credit card fraud, tax scams, shoplifting, ID theft, insurance fraud, bookkeeping or accounting fraud when hired for services, mortgage, and investment fraud, internet or cybercrime, etc.
Protecting Your Company Against External Threats of Fraud
Create a Code of Conduct and Sound Management Plan
It is ideal for documenting everything appropriately and maintaining a file of important business transactions and financial records. The data saved in your computer is more vulnerable to theft and an easy target for spies and hackers. This also includes the list of duties that who is going to manage which work. Also, it is quite effective to create and document procedures and create a disaster recovery plan in case of data theft. Moreover, training of employees and implementation of effective procedures, coupled with activities like maintaining and auditing the program, is a big plus for minimizing external threats of fraud.
Shore up Your Site’s Security
There is no denying the fact that creating and implementing security measures and ensuring all the data security network protocols can be a nightmare. Especially when you have piles of business records, files, and documents all in one place, to prevent leakage of sensitive data, you need to classify each file. This allows you to have control over your company’s data.
If the sensitive data is housed online, you must assign different layers of security, perhaps by putting firewalls on the server. If the data is stored in-house, you need to shore up your on-site security to reduce external threats of fraud. This includes locking everything down, installing fire and security alarms, and limiting access to your critical documents. This also includes labeling all records, files, and documents appropriately, conducting regular bookkeeping audits, and other similar tasks.
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