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How Entrepreneurs Can Fortify Their Startups Against Fraud

Businesses that neglect workplace fraud detection are leaving themselves open to catastrophic losses

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Fraud in the workplace is a problem of gigantic proportions. Everything from a little light skimming of the cash register to fraud at a corporate level represents extreme risks that organizations need to guard against.

While each industry has unique risks that it must mitigate against, there are plenty of common threats that a robust and structured anti-fraud policy can help prevent.

Understanding these risks and how to protect your business against them is a critical step in mitigating fraudulent employee risks.

Workplace Fraud: Understanding the Risks

Let’s be clear, understanding the size of the problem will not make pleasant reading. However, it is essential to read because knowing the size and scope of the problem is a vital first step to mitigating the risk.

The challenges that employee fraud raises are often in line with e-commerce fraud trends. But there are plenty of areas where they differ and detection methods and how businesses defend against it differ accordingly.

But how big is the problem? Well, huge if the latest Association of Certified Fraud Examiners report into occupational fraud is to be believed. To illustrate the size of the problem we only need to list a few of the key takeaways from the report:

  • Duration and loss: An average fraud case will go undetected for 12 months and cause a median loss of $117,000.
  • Revenue loss: The report estimates that 5% of all revenue is lost to occupational fraud.
  • Fraud types: Asset misappropriation (theft in common parlance) accounts for 86% of all employee fraud. Other high-rankers include corruption and financial statement fraud.
  • Department: Four departments (accounting, upper management/executive, sales, and operations) accounted for half of all employee fraud.

The report does make a grim reading. But there are plenty of positives to take from it. The most notable is the improvement in these statistics among organizations with strong anti-fraud procedures in place.

Strategies to Mitigate Fraudulent Employee Risks

It is obviously necessary to stop fraud that can disrupt the customer experience. However, the problem of employee fraud should not be overlooked at its expense. The potential scale of workplace fraud means robust measures are needed to protect an organization from “insider” fraud.

Some of the most successful measures for workplace fraud prevention are detailed below.

1. Implementing a Strong Ethical Culture

This is more important than it may appear at first glance. But a strong ethical culture that encourages employees to voice their concerns is an incredibly potent anti-fraud measure.

The importance of this is emphasized by a single statistic – 42% of workplace frauds are detected by tip-offs. This is three times as many cases as the next most common method.

Workplace culture should promote honesty, integrity, and transparency. It should also make employees feel that their concerns are listened to and taken seriously.

2. Smart Security Technology

While cybersecurity is absolutely critical, physical building security systems and measures are an essential component in protecting against fraud in the workplace. Theft, or “asset misappropriation”, is the number one threat that workplace fraud poses. Physical security measures such as the examples listed below can substantially lower the risk of theft:

  • Smart security cameras: A modern no business video surveillance system that utilizes the latest business camera technologies can act as a deterrent as well as catch perpetrators red-handed. The latest generation includes features such as high-resolution imaging, night vision, cloud-based remote systems, and the integration of AI.
  • Smart access control systems: The latest generation of smart access control and fob entry systems can easily be integrated with companion technologies like business surveillance systems and alarm systems.

Physical security is an essential part of an integrated security policy, it can radically reduce workplace theft and other forms of employee fraud.

3. Regular Audits and Surprise Checks

Again, these can act both as a deterrent and an effective method of detecting fraud. Surprise audits and checks deter fraud by serving as a reminder that regular monitoring for irregularities is undertaken.

It also ensures transparency and accountability making it more difficult for fraud to go unnoticed. This is important as the average duration of fraud is a year – and a lot of damage can be done in 12 months.

A proactive policy of regular audits supported by surprise checks can significantly reduce the opportunity, and the willingness, to perpetrate fraud in the workplace.

4. Employee Education and Awareness Programs

Finally, employee education and training can play a crucial role. With 42% of all workplace fraud uncovered by tip-offs, an educated workforce that understands the risks and the warning flags of fraudulent behavior can be an added line of defense.

It also helps to promote a workplace culture that is open, transparent, and more resistant to employee fraud.

An Inside Job: Mitigating Employee Fraud

Businesses that neglect workplace fraud detection are leaving themselves open to massive, potentially catastrophic, losses. However, being forearmed is forewarned, and much can be done to mitigate the risks.

A combination of smart technology in the form of business surveillance systems, an ethical culture that promotes openness, and robust auditing procedures can greatly reduce a business’s exposure to workplace fraud.

With 5% of all annual revenue lost to employee fraud, investing in robust internal fraud controls is a smart investment.

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Practical strategies that companies use to guarantee long-term growth while increasing profitability

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In the world of business, achieving development and success is a shared objective. Maximizing earnings is an important part of this journey because it is a vital source of funding for long-term, sustainable business growth. (more…)

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Lessons We Can All Learn From Martin Luther King Jr.’s Leadership

While reflecting on the magnificent life of Dr. Martin Luther King Jr. I began to uncover what truly made Dr. King such a powerful leader

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While reflecting on the magnificent life of Dr. Martin Luther King Jr. I began to uncover what truly made Dr. King such a powerful leader. Many revere him for the change he brought forth so it’s no wonder that he was heavily influenced by the man who said, “Be the change you want to see in the world”. He embodied that statement on the deepest level and lead people through one of the most challenging yet historic times in our nation. 

But what was it that made Dr. King’s movement so different than the rest? A quality that transcends ego and unites a people so divided? 

My greatest and most moving discovery while studying the life of Dr. King was the very answer to our question. 

Yes, he had the personality to be a leader, yes he had the bravery to use his voice, yes he evoked REAL change in government and policies, but the manifestation of all those comes from his willingness to lead a movement truly rooted in consciousness. 

A peaceful approach

Dr. King was continuously met with frustration, hate, and even violence by both law enforcement and those who wanted to fight for equality through violence. But the more violent things became, the more he dug his heels into a peaceful approach. Dr. King’s unwavering faith in the power to lead with peace and not violence is undoubtedly why his legacy is such a pillar of our nation still to this day. It is easier to fight.

Hate, anger and separateness from one another are primitive emotions on the emotional scale of well being but It takes awareness, understanding and elevated consciousness to move from a place of peace and understanding. Dr. King knew that we all have access to these states of higher consciousness and that our true power lies in a peaceful approach.

He is an example of the truest essence of our consciousness in this human experience. How to truly love your neighbor as yourself. 

Conscious compassion

Even the strongest opponents are human. Meet hate with love + compassion for the enemy” he said. It wasn’t his resistance to violence that made him a peacemaker, but rather his commitment to keeping compassion and connection to all humanity at the forefront of his movement. A profound understanding that underneath all the hate, violence and discrimination, we are all one. We all come from the same source and we are all human.

A conscious king

A man of his position, his power, his following could have been easily swayed by the human temptations of the ego. But he remained steadfast in his cause to bring forth real change. He understood on the deepest level that we are truly a stronger force in the universe when we move as one unit, with one mind, and one goal. That the separation from one another is the weakness of humanity. That our strength is in those things that unite us all, the qualities that give us life.

His success was in uniting not just the people of America but the consciousness of America.

No matter our gender, or our social class or our color, we all love, and we all seek peace. We all feel joy and happiness, we all want to be met with compassion and understanding. 

His cause went far beyond the need for physical freedom and equal rights. His cause was for freedom of mind, freedom of heart, freedom to be one. 

Lead with love

In his last speech he said, “I may not get there with you, but we AS A PEOPLE will get to the promise land”. And we will. At some point, we will inevitably come back to this oneness that we all come from.

The truth is? We don’t know when our last day is. Our last march. Our last speech. So this Martin Luther King Jr. Day I ask you, what will your legacy be? Are you leading a life founded in the principles of Dr. King’s movement, founded in the higher consciousness of humanity? Every moment is an opportunity to love, to show compassion, to bring forth peace and in the words of Dr. King “The time is always right to do what is right”.

Dr. King said, “I’m here to remind you, we’ve come a longggg way, but there is still work to be done”. 

And I’m here to remind you this Martin Luther King Jr. day in 2024 that we HAVE come a longggg way, but there is still work to be done. 

His fight is our fight. His mind is our mind. His spirit is our spirit. Rooted in the consciousness of all humanity. We are all one. And when we embrace the understanding of that, we will truly say

“Free at Last, Free at Last, Thank God Almighty, We are Free at Last”.

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