06 Feb How to Protect your Business from Internal Threats
As a home and business security alarm company, Zions Security Alarms knows how important a good security system is to protect what is most important to you. We understand the value of a high-tech security system, like ADT Command. Cameras, motion sensors, electronic locks, key card access, and much more go into protecting you and your business. We know all the ways you can defend against external threats like robberies and vandalism. It’s literally our job!
However, many small businesses are affected by internal threats. Whether it’s stolen blank checks, payroll schemes, or shoplifted merchandise, small businesses are much more likely to fall victim to internal theft than larger companies.
The Threats to your business
If you’re a small business owner, you probably see your business as your baby. You’ve given your blood, sweat, and tears to the growth and success of your baby. So, like a momma bear, you want to do everything possible to keep your baby safe. But, you might not be aware of the many possible threats. And even worse, you might not know how to protect your business from internal threats until it’s too late.
Sure, we all know the usual suspects: robbers and burglars, Breaking and Entering, vandalism, shoplifting, etc. But have you considered this very ugly truth? That the people you employ might not be as protective of your baby as you are.
In a forbes.com article, they stated this statistic: “75% of employees have stolen from their employer at least once, according to the U.S. Chamber of Commerce. The Chamber also found that up to 30% of business failures may be the result of employee fraud and abuse.”
How many times have you heard horror stories of accountants completely draining their boss’ bank account? Or team members systematically stealing merchandise from the stores they work at? Experiencing this betrayal of trust just once is one time too many for a small business owner. The people you entrusted with the safety of your baby have turned against you. And it’s personal.
What can you do?
So, besides using the basic employee screening methods (background check, credit check, drug test) what can you do to protect your business from internal damage? Luckily, Ivy Walker of forbes.com gives us a list of precautions that can be used regularly to catch a threat before it turns into a complete disaster:
“Protecting your business from employee fraud and abuse is an ongoing process that any business owner can master. Here are five things you should consider doing right now to get started:
- Conduct a fraud risk assessment to understand your exposure. Ask your accountant to help with this or seek out a fraud risk assessment tool.
- Know your numbers. It’s essential that you review financial statements for your company regularly—quarterly at a minimum, but monthly is best. Watch for any unusual or unexpected changes and ask questions. Not comfortable reading financial statements? Invest in learning the financial basics every business owner should know.
- Segregate duties. No employee (or paid advisor) should have end-to-end control over your company’s finances. Learn which aspects to assign to different people to ensure there are proper checks and controls in place.
- Conduct an anti-fraud training for your staff at least once a year. This will let your employees know that you are aware of fraud schemes and that you are paying attention.
- Cultivate a culture of integrity. Adopt a code of conduct and make sure that your employees know that you expect them to behave ethically at all times.”
Having a proactive approach to internal threats will be your best defense. Using these simple and smart methods to stop any criminal behavior before it happens, will keep you and your business safe and happy.