24 Feb Top Tips to Prevent SME Fraud

As a sole trader or SME, you may have to wear many hats: Accountant, Marketing Manager, Labourer, and Cleaner. And now, Fraud Prevention Manager: there’s a lot to think about when you run your own firm.

While having sufficient business insurance cover protects you from a number of difficult situations, the security of your business is an issue you will need to think clearly about as there are certain risks you should be actively protecting your business against.

Fraud management for SMEs and sole traders

Fraud is one of the major commercial crime risks faced by businesses today. Your company is at constant risk of digital fraud, such as phishing scams and identity theft, but you could also be facing other risks.

Here are our top tips to help you protect your small business from fraud.

1. Educate yourself and your employees: Looking out for suspicious activity, transactions, and communications is key in fraud prevention. If you know what to look out for and how to handle the threats, you can make sure your staff know the risks as well because fraud can affect their job security. Plus, if your staff know you are on the lookout for fraud, they are less likely to try to commit any offence against you.
2. Keep your security systems up to date: Most businesses these days have some sort of digital presence, even if it’s just receiving and sending emails and having Zoom conference calls. However, if you also do your banking online, have any sort of eCommerce platform, or carry out digital onboarding of clients, then you’ll need to make sure your cyber security is up to the job. Once set up it is then vital that you keep the systems up-to-date and ensure any security updates are implemented in good time.
3. Safe storage of sensitive information: The importance of correct document and transaction handling cannot be overemphasised in the prevention of fraudulent activity. Business documents, sensitive material, and records should be stored securely. Documents stored digitally should be encrypted and managed via a protected platform built specifically for the task.
4. Thorough record keeping and regular audits: If you know how your business is running, you should be able to spot any unusual activity in your accounts and, hopefully, the early signs of fraudulent activity. Employing a professional accountant and bookkeeper can be key in this respect and you should work closely with them to ensure you keep your documentation up to date.
5. Invest in the right business insurance package: There are several types of business insurance, including employer’s liability insurance (legally required if you have even one member of staff), public liability insurance, product liability insurance, business contents insurance and more. If fraudulent activity or a data breach would be catastrophic for your business, you may wish to add cyber insurance or commercial crime insurance to your package of cover.

Get the right business insurance package for your needs

Tredstone is powered by City Insurance Group. Speak to us if you need to upgrade your cover, or to create a new business insurance package to reflect your commercial risk.

We can ensure your cover is cost-effective and robust enough to protect you in the event of fraud and commercial crime.

Get a quote today.