When it comes to running a business, you don’t need anyone else to tell you about the difficulty in staying afloat and keeping your company on a good path. Market forces and competition from rivals is often all that you need to struggle in a location or area. There is also the fact that public tastes and demand may be different from what you were expecting. The fact that there are so many variables involved with running a successful business makes it difficult to be a success, but of course, there are also some issues that a company needs to avoid. When a business is a victim of fraud, they are at serious risk of going under.
When you think about the thin margins between success and failure, it is not an exaggeration to say that even a minor fraud could turn a successfully running business into one that is failing and losing money. In the current economic climate, this may be the difference between thriving and going under, so it is important that business people are aware of common frauds that occur, and that they know what can be done to minimise the impact of these frauds.
One of the things about payroll fraud is that it can be very hard to check. Depending on the nature of your business and the size of your firm, you may have a lot of time-slips or working hour orders coming in and you don’t have the time to check them all. There is definitely an element of trust involved with many workplaces when it comes to payroll accounting and while many people will be trustworthy, human nature means that some people will look to make a bit extra for themselves. The individual may not feel that this is a major crime. If they are just taking a few extra miles or a few extra hours, they will think that it is money that the company won’t really miss.
Of course, when this style of crime is committed over a lengthy period of time, the money soon adds up. Also, when this style of crime is being undertaken by a lot of people at the same time, the money involved starts to become a lot. There is also the principle of the matter, so payroll fraud is a serious threat to a company and it is something that every firm should be looking into.
“Double Cheque” Fraud
This is the sort of crime that can be carried out by someone in a position of power. A business will have to pay a lot of bills and cheques, and this gives someone the opportunity to make out a payment to themselves at the same time. When the same person is later in charge of reconciling the books, they are provided with the opportunity to cover up their actions, allowing them to take money out of the business with a reduced risk of being caught.
The use of cheques is falling but they are still in use. However, the biggest issue is likely to be having the same person making payments and then reconciling the books. This may be difficult for smaller businesses but you should look to have two different sets of people carrying out this work as this will provide a higher chance of catching any wrong-doing.
The person in charge of ordering stock needs to work within a set budget but there are opportunities for them to make some money for themselves. When stock is over ordered, there are two options. Some sellers may provide the chance to return the goods, perhaps for cash or for a gift card to the value of the over ordered items. In this case, the person can take the cash, or take the card, in full or in part, allowing them to make a profit. There is also the opportunity for the person to take the over-ordered items themselves and either keep them or sell them on. Either way, the company is losing money on every order and again over time, this can be a real drain on the finances of a company.
Businesses cannot tolerate fraud anymore and this means that when fraud is noticed, they are far more likely to press charges and want to make an example of the person who committed fraud. This means that the accused needs to have the support and services of an experienced solicitor who can provide them with representation and full support. Calling on an experienced defence solicitor is vital if you face serious charges and you need to state your case in a robust and effective manner.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.