5 Schemes of a Fraudster

No business or organization is immune to fraud.  It can happen anywhere.  In 2017, organizations with less than 100 employees lost nearly $1M to insider theft.  Discovering a fraud too late, could close the doors of a thriving business for good.

Don’t be the next victim.

Here are a few schemes to watch for:

F – Falsified wages – When the number of hours worked or the rate of pay is manipulated.  This typically happens when the same person who enters the time also approves it.

To protect your business from this scheme, you want to make sure the person who enters payroll doesn’t also have the ability to approve payroll.

R – Refunds – When employees issue unauthorized or fraudulent refunds to customers.  Employees will oftentimes collude with friends to commit this fraud.

To protect your business from this scheme, pay attention to unusually close relationships between managers and employees.  Also make sure employees do not have the ability to issue refunds without a managers approval.

A – Altered receipts – When employees submit doctored receipts for charges that were not incurred or for higher amounts.  They count on the fact that most employers do not review or verify receipts.

To protect your business from this scheme, pay close attention to receipts submitted for reimbursement.  Check them to see if the dates match and the amounts are realistic.

U – Unrecorded sales – When employees sell a product or service, take the payment from the customer, but do not record the sale.  They pocket the cash and may ring up a “no sale” to cover up the theft.

To protect your business from this scheme, you may consider installing surveillance cameras to watch employees who handle money or company assets.

D – Duplicate reimbursement – When employees get reimbursed more than once for the same expense. They may submit the same receipt on different reimbursement request.

To protect your business from this scheme, you should require that receipts be submitted within 30 days of the expense being incurred.  This way they cannot resubmit the same receipt twice.

To learn more ways to protect your business from insider fraud, grab a copy of, Did You Hire a Fraud?

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Bernadette L. Harris
Forensic Accountant at By The Book Accounting
Bernadette L. Harris is a Forensic Accountant, Certified Fraud Examiner, Expert Witness, Keynote Speaker, and #1 bestselling author who has helped hundreds of business owners put systems in place to protect their businesses and prepare for growth.

Her latest books, Business Blueprint 2.0 and Did You Hire a Fraud? can be purchased at: Shop.BernadetteHarris.com.

She speaks to audiences across the country about entrepreneurship and fraud prevention. Follow her on social media @TrustBernadette

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