Even the most optimistic of your employees is likely to concede it has not been an easy twelve months. Sales are down, the UK economy is in debt and unemployment is rising. In hard times, how far would a depressed employee go? Would one of your workers commit fraud?
Research from the UK’s fraud prevention service CIFAS suggests an economic slowdown and a rise in fraud certainly go hand in hand, with a 40% increase in people being falsely impersonated last year compared with 2008.
Worse for the business, half of the 2,000-plus employees surveyed by consultant Ernst & Young in 2009 thought that one or more types of unethical business behaviour was acceptable during a recession!
The implications for your business are clear: when the economy is in turmoil, the risk of employees committing fraud is likely to increase. You and your executive colleagues must take steps to protect the firm against potential exposure.
Your first priority should be implementing technology that can help combat errant behaviour. And specific software systems, such as spend analysis and document management, are key to fraud detection and prevention.
Companies looking to understand the direction of cash must understand who is being paid and when. Analytics will help you identify which employee is acting in an unusual manner.
Accidental errors – such as billing mistakes and invoice miscalculations – can be seen. And taking a strong stance on spend management will also allow you to track and trace potential weak spots that could provide a loophole for fraudsters.
Document management is also key for fraud prevention. Electronic capture of documents will mean the business will be able to preserve the integrity of its evidence and documents cannot get altered, shredded or mysteriously ‘lost’.
Invoices, orders and other financial documents can be imaged, securely stored and all interactions with the imaged documents are recorded which creates an audit trail, meaning the opportunity for an errant employee to cover their activity is significantly reduced.
The economy may well be improving but times remain hard for many, making employee fraud a real risk. Finding the right technologies for fraud detection and prevention are therefore vital, from spend analysis and document management systems through to expense management and time and attendance solutions. The time to act is now.