small business, Uncategorized

5 Outrageous Frauds Entrepreneurs Should Know About

[tweetmeme source=”LilBizBigWorld” only_single=false] Entrepreneurs should be wary about different fraudulent practices aimed at small businesses. Prevention is better than cure and the best way to prevent fraud is to know how it is being done and who usually does it.

1. Just last August, news broke about an employee who stole $60,000 from her employer which almost caused the business to close down. This is one of the most common fraudulent practices done and most of the time, it’s an inside job.

2. Firms making false claims about the SBA loans. These firms charge the entrepreneur for processing the documents, sometimes “ensuring” that their applications for the said loan would be approved.

3. Photocopier fraud. There are photocopier machines that save data on its hard drive. When you sell the machine and you forgot to delete all images stored on the hard drive, there’s a possibility that those images would be accessed and it would ultimately result in data protection breach.

4. Check tampering and fraudulent billing. These are perpetuated by those who have access on cash receipts and cash disbursements. Internal controls should always be enforced, no matter how much you trust your employees otherwise, it may mean disaster for your small business.

5. Financial Statement Fraud. According to the article Small Businesses Suffer From Company Fraud, this is the most costly with a median loss of $2 million.

Small businesses have a high risk of being victimized by fraudulent activities. Because of this fact, entrepreneurs should have a high regard for the safety of their data. Otherwise, all the hard work you’ve put in would be put to waste if your business goes under due to fraud.

44 thoughts on “5 Outrageous Frauds Entrepreneurs Should Know About”

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