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How to prevent fraud in business: Part 1

Image courtesy of Stuart Miles at

Both small and big companies have to put controls in place to prevent fraud. I have heard a lot of stories about people living in one country and starting a business in another country. They leave the business underneath the supervision of another, at the end of the day all what the business does is to make losses. I was talking to an individual, apparently, the person started a business in haulage, and all the staff were reporting were losses. The person then decided to close down the business and the staff started begging (how funny). I told the person it is a small business you have to be there in person that is the only way your business can become successful. 

Even, when the owner is present at the business there are still some individuals that will try to defraud the business, talk-less of you being far away. When your business is small it is clear that you cannot put control of very high quality that will prevent fraud cause it is expensive. Once your business has now grown bigger and you can now afford to put those sophisticated controls in place then you can decide to go Antarctica and manage it from there. Back to the story I was telling you above, the individual is now present in the country where the business is, hopefully , some improvements will occur. That is just one of the stories I have heard. Thus, it is best to do your supervision yourself when the business is still small then you can make delegations once it is bigger.

I have heard a saying if someone can steal $1 if they have an access to $1,000,000 they will steal it. You might be thinking to yourself that is ridiculous, that was my initial thoughts too but it is true, I once saw a staff take £2 from the company's money to buy food to eat, few weeks later the staff was sacked cause the staff had stolen £3000 from the company. The person was also asked to pay the money unelse legal actions will taken against the person. Well, the person agreed to pay the money back. So I am telling you today, if a person steals from your company's money let the person go, however if a person steals a little amount like £2 and the person confesses and becomes apologetic then you should overlook it, however stealing is stealing whether the amount is large or small. Thus, it is totally wrong.

A change in the attitude of an employee could suggest a possibility of fraud. For example, the employee has just been disciplined by an employer, as a form of revenge the person might decide to steal from the company. You should note that, this is just a likelihood and not a certainty as such employees should not be made to feel like potential thieves, some do have high moral standards.

This is just part 1 of this article, do check out for part 2. Keep checking my blog regularly. Cheers!


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