Fraud Prevention Shortcuts

preventing fraud - Complete Controller

Fraud prevention is essential for all organizations. The bigger the organization, the more chances of fraud. Fraudulent behavior can happen in any company or business despite the organizational structure and the number of workers. Small business managers trust their workers more than usual. There may be weak internal controls. Fraud affects the finances, image, and morale of the company. Most organizations adopt shortcuts for fraud prevention. These tactics only decrease the opportunity for fraud.

Following are Some Fraud Prevention Shortcuts Complete Controller. America’s Bookkeeping Experts

Recognize your worker

References and criminal history of employees must be checked before hiring. Know your employees. Notice any change in their lifestyle, behavior, and devotion. Alcohol and drug abuse and involvement in gambling are also an alert. Seasoned employees are often the trusted one, but, without monitoring, they may commit fraud. Many people are opportunistic, and a lack of internal controls may encourage them to involve themselves in fraudulent activities. 

Oversee employees meticulously

A lack of checks and balances can increase the risk of fraud. Your employee’s activities should be monitored and supervised. Money or cash handling should involve more than one person. If a worker is working extra hours without supervision and is not going to leave, his behavior needs to be analyzed. Critical risk area staff should be rotated periodically as a tool for fraud prevention. Resistance to change by staff in SOPs of inventory or cash handling is an alert.

Clear segregation of duties and responsibilities of an area is a shortcut way out to avoid fraud.

Motivation and pressure

Managerial staff, administrators, and security supervisors often have the opportunity to visit inventory areas without any supervision, so that they may commit fraud under any social pressure.

Staff should be motivated regularly to practice and adopt ethical behavior in the workplace. Routine orientations and regular training of staff regarding fraud policies and procedures should also be practiced.

Install computer security measures

Technology advancements are crucial for decreasing the risk of fraud. Installation of security camera and entry codes are an important shortcut to prevent fraud.

The application of passwords and firewalls should be practiced. Passwords and entry codes should be changed regularly. The accessibility of these technologies should be strictly restricted to authorized personnel only.

Practice purchase orders

A consecutively numbered purchase order should be used to place orders. Purchase orders of those issuing and signing authority should be different. Supplies should match with these purchase orders. CorpNet. Start A New Business Now

Control cash receipts

Consecutively pre-numbered transaction slips should be practiced. Sale slips and cash receipts should be matched and done by different people.

Use unannounced audits

Surprise audits without prior intimation should be done. The following audits should be scheduled: annual and quarterly audits by internal as well as external audit teams of all inventory, transactions, and fixed assets.

Trail your business checks

All business checks should be pre-numbered and duly signed by approval authorities.

Inventory management and security arrangements

Stock receipt, store possession, and distribution should be assigned to different staff. Similarly, the stocktaking of inventory should be done by separate staff.  CCTV cameras should be installed to monitor the movement of staff and inventory. No stock should be kept without written records.

Reconciliation of accounts monthly

A written policy for cash handling should be established. Staff should be trained to distinguish counterfeit, stolen, and bad checks. An independent person should reconcile bank accounts of the company monthly. All checks should be signed. Financial statements should also be monitored regularly. Download A Free Financial Toolkit

Generate a fraud reporting system

Establish a fraud reporting system where anyone can report doubtful actions. All workers should be educated and trained in the detection and reporting system. You could also have an anonymous tip box.

Customer returns

Customer returns are vulnerable to fraud. The return receipt and delivery staff should be different.


Written policies and SOPs for all critical areas should be developed and implemented strictly after the training of staff.

Company/client grievances

Complaints by clients provide a clue for the detection of fraud.


Fraud prevention and fraud handling are essential to secure your business. Following the above shortcuts in an organized manner will lead to an anti-fraud policy and strong internal controls.

LastPass – Family or Org Password Vault About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Cubicle to Cloud virtual business