How can fraud affect your business?

• Serious financial loss
• Lowering of staff morale
• Adverse publicity
• Disruption caused by a major investigation

The spread of "Business Culture", the development of computer technology and the increased attraction of fraud to the professional criminal have contributed to the rise in fraud cases in the UK.

How can you prevent fraud in your business?

Consider employees

• Check all references.
• Define each person's responsibilities clearly and make sure they know who they should report to if problems arise.
• Avoid having "indispensable" staff who alone know the workings of a particular part of the business.
• Many frauds require regular activity by the fraudster. Make sure everyone takes regular breaks from work. The good employee who never takes a holiday just may be ripping you off!
• Remember - the bigger and more sophisticated the fraud the more likely it will be that senior staff are involved.

Consider management control

• Review your management control systems for weaknesses. Take advice from specialists if you are uncertain.
• Always check bank and trade references of suppliers and clients through trade protection organisations or credit reference agencies.
• Protect your financial position by asking new clients for part payment in advance or make only partial deliveries. You can also ask for personal guarantees - credit insurance is another option.
• If you are suspicious of an individual, remember that details of bankrupts are held at your local official receivers office. Details of disqualified directors are kept by Companies House, and are available on the Internet free of charge at: www.companieshouse.gov.uk

Consider the working environment

• Have a clear company policy relating to fraud, and stick to it. Come down hard on irregularities. Set an example from the top.
• Inform staff and suppliers of your policy.
• Encourage "whistle blowing" but be prepared to protect any member of staff who does so.
• Use the advice of internal auditors or non-executive directors.
• Dissatisfied employees are more likely to be tempted by fraud.

Consider computer security

• Have a clear policy concerning the use of computer systems. In particular, change passwords regularly and keep them confidential.
• Ensure all staff are aware of their legal standing with regardsto their use of computers, particularly with regard to The Computer Misuse Act.
• Employ staff who know what they are doing.
• Take regular back-ups of data. Keep copies of back-ups off the premises in case of theft, fire or other disaster.
• Beware of computer viruses through unsolicited discs or through the Internet.
• Seek the advice of experts if unsure.