In a small business, wasting money can be the death rattle to success, and nothing blows through money and cripples a business like fraud. In most traditional companies there are measures put in place to protect against fraud, including things like insurance and really good checks in the system. For businesses that don’t have the budget for this, a fraudulent employee can completely destroy any chances of survival or growth. Many businesses with a lot of potentials have found themselves staring down a major financial and even legal setback due to fraud.
In the modern era, many businesses have a workforce that is spread out across the world, and this makes avoiding fraud even more difficult. Even if your freelancers don’t have direct access to the bank accounts and credit cards, the type of fraud you are most likely to experience is through them overinflating the hours they’ve worked. According to the law firm Hart & Powell, embezzlement through false billing is something a small business owner needs to watch out for.
A small business head of content shared on her own experience with false billing and how it wasted company resources. The content writer they brought on lied about the hours she worked in order to earn more money, and this meant company resources weren’t being utilized correctly. Additionally it’s hard to work with a dishonest person, and for that reason she had to let go of this employee. Many business owners learn this lesson the hard way, and possibly when it’s too late to rectify. In that case, it’s good to get in touch with a lawyer who can help untangle the mess.
When you work with freelancers who aren’t in the same room as you, it’s impossible to really keep track of what they’re doing and make make sure they’re not being dishonest or fraudulent. So what proactive measures can you take to protect yourself and your business from this. Here are a few tips and tricks to prevent this kind of fraud.
Time Tracking Apps
The great thing about online work nowadays is there are so many ways to make sure you know how long it takes to get thing done. One way to do this is investing in time tracking tools and apps that can be installed on any computer or within a web browser so that you’re always clear on what your employees are doing. These apps are available for any budget, and there are even some great free ones too. This resource can be very valuable in preventing fraud in your small business.
As a business owner, there’s always hundreds of things that need your attention, and holding employees accountable can easily slide to the bottom of the list. When that slides, some people will take it as an opportunity to take advantage. This can be prevented by making accountability a priority in your business. Whether you do this through daily huddles, or weekly check-ins, it’s important to pay attention to the people working for you. Touch base with them to help them grow and improve, and to know how they are doing in the job. This isn’t just to avoid fraud, it also makes people more loyal to us if we show that we care, and help them stay on task.
Know How Long Tasks Take
If you have a really good eye on your business, you’ll know every intricate detail about the work that go into it. For example, if your employee is earning hourly, you’ll have a rough idea of how long each task is going to take. That means when they bill you and the numbers don’t make sense, you will be able to spot the lie quickly. If you’re growing your business that right way, nothing will be a mystery and you won’t be under risk of embezzlement.
Even in a small business, embezzlement isn’t a minor thing. It makes a company bleed money that could be going towards growing the business. Small business owners are particularly at risk because there’s always something going on that can distract them. To avoid that, build the right systems into your business and work on making sure they are efficient and helping you get more information about your operations. Keeping an eye on things makes it easier to spot irregularities and from there, decisions can be made and action can taken swiftly.