Business Owners Get A Primer On Preventing Fraud
By Cassie M. Chew
Developing an ethical business culture is one of the most important things small business owners can do to protect themselves against fraud, Gregory E. Weddell, vice president of Chevy Chase Bank's Commercial Banking Group told a group of two dozen business owners at a recent educational seminar.
Cultivating this culture starts with management and involves creating a positive work environment, training, discipline and using banking products designed to detect and stop fraudulent activity. Weddell encouraged the group to conduct business electronically.
"The more electronic transactions you have, the better paper track you have," he said.
Small business owners may do well to listen to Weddell's advice because their companies suffer a disproportionate amount of fraud.
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Additionally, almost one-third of all fraudulent activity happens in accounting according to the Association of Certified Fraud Examiners. Most incidents involve fraudulent checks and invoices.
"Check fraud, that's gonna be the number one place it happens," Weddell said.
During the 90-minute presentation at the bank's headquarters in Chevy Chase, he shared ACFE's ten tips to prevent or detect fraud.
Hire a CPA to examine the books.
Have a written code of ethics.
Set a good example.
Have reasonable expectations.
Treat employees well.
Restrict bank account access.
Perform regular bank reconciliations.
Adequately secure inventory and supplies.
Adequately prescreen employee applicants.
Give employees a way to report fraud.
One simple way a business owner can prevent fraud is by using business-sized checks. They offer more protection from fraud because there are more data fields on full-sized checks than on a personal check, Weddell said.
One of the most powerful things business owners can do is to monitor their accounts.
"Get an online banking tool that allows you to see every transaction the day after it happens," Weddell said.
Small business owners should consider working with banks that offer products designed to detect fraud "up front and give the bank and the business an opportunity to do something about it." Some banks will compare checks presented for payment with previously submitted checks. Other services allow businesses who pay invoices electronically to set up a list of approved venders and limits on dollar amounts.
Business owners concerned about fees for these services may want to consider bank programs that offer incentives like account balance credits that can help offset fees.
The seminar is the first in a series the bank will host throughout the year, said Maria Antokas, vice president of cash management sales, for Chevy Chase's business banking group.
"We saw a need to communicate with small business owners." Antokas said.
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