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Fraud Tip: Financial Control Systems Protect Your Business

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As a small business owner, you understand the value online tools can bring to your business, whether it’s accounting software or an expanding e-mail database of customers. Online tools also can help in your fight against fraud.

You can limit your fraud risk significantly by implementing these three readily available online financial controls.

1. Leverage automated fraud controls.

You should take advantage of the latest fraud protection systems to create an additional layer of protection for your business. For example, several banks now offer real-time fraud monitoring, detection and alert systems, a stop payment option and auto entitlement as part of your online account. These tools provide layers of protection before, during and after transactions occur so you can identify and prevent fraud.

2. Conduct regular audits.

To streamline the auditing process, consider taking advantage of new online banking and accounting software that can dramatically expedite cash reconciliations, analysis and reporting.

Your online banking program should provide immediate and convenient access to daily cash balances and real-time reporting of pending and posted transactions, as well as, a range of alerts and reminders to keep your fingers on the financial pulse of your business. Enlist your accountant as an additional resource to conduct cash reviews, audits, fraud evaluations and reconciliations, serving as a “check and balance” to your internal staff.

3. Defend against customer fraud.

Customers, or those pretending to be customers, are a big source of fraud and theft. Credit card and check fraud are major sources of financial losses to small businesses. You can limit your exposure with a few simple steps.

If you suspect credit card fraud, clear and reimburse a $2 transaction before a purchase to flag any problems with the credit card company, according to the FBI. You can also teach employees to look for telltale signs of credit card fraud, such as customers asking for overnight delivery of expensive items to a third-party address. Some merchant services offer check-guarantee services that scan checks against a database at the point of purchase to help you eliminate fraudulent or bounced checks, as well as returned-item fees.

The U.S. Chamber of Commerce offers simple guidebooks on these and other fraud-prevention tips.


This content is educational in nature and is not an advertisement for a loan or business solicitation. It does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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