April 16 2025

3 Ways to Protect Yourself With Business Fraud Prevention

CAP3:Reveal Helps Keep Your Business Assets Secure

At CAP3:Reveal, we help small- to midsize businesses with a full range of financial solutions, from bookkeeping to fractional CFO services. Our purpose is to implement this accounting support to place your organization in a position to thrive, allowing you to concentrate on your favorite aspects of running your business while we handle the minute details.

Because business fraud prevention is vital to the success of your company, we wanted to review some of the most common forms of occupational fraud and highlight the most effective strategies to protect yourself.

3 Ways Business Fraud Prevention Protects Your Investment

There are three main anti-fraud elements that reduce fraud losses and duration by 50% or more.

These include:

Regular independent audits or reviews
Implementing proper internal controls
Account reconciliation

We’ll take a closer look at some of the most common frauds and how these elements go a long way toward protecting you.

How Can You Protect Your Business From Fraud? 3 Ways We Recommend

1. Regular Auditing

Regular auditing should be among a company’s first line of defense, establishing a detailed process with robust data analytics can provide insight into unusual activity that needs further investigation.

This is vital in protecting your business from fraud like asset misappropriation. This is the most common type of occupational fraud. Whenever an employee uses one of your business’s assets for personal use, they are committing asset misappropriation. For example, this can occur if the employee borrows money for a personal reason.

Often, asset misappropriation goes far beyond just common cash theft, and can include anything from improper purchases, inappropriate payments and even payroll fraud.

CAP3:Reveal offers thorough independent reviews and comprehensive diagnostics of your existing accounting practices so you’ll always have a grasp of your available assets and a warning if the numbers are concerning. We conduct detailed examinations including data analytics that can provide the business fraud detection that’s so vital to prevent financial loss.

2. Certifying Financial Statements

While financial statement frauds are not as common as asset misappropriation, they are among the most costly types of business fraud. In 89% of cases, there was a median loss of $120,000 and 5% of cases showed a $766,000 median loss.

With disturbing statistics like this, your business should take no chances.

Certifying financial statements means they have been audited and approved by a certified professional, along with a professional evaluation of the financial statement. This is vital because the certification process can provide details that can indicate possible fraud.

3. Account Reconciliation

Account reconciliation is a critical element in protecting your business. Through account reconciliation, we examine financial transactions and balances. This helps us determine how accurate the financial reporting is and highlights any problems that could indicate fraud.

Account reconciliation can cover everything from examining physical inventory to taking a careful look at credit card and bank statements.

At CAP3:Reveal, we recommend that accounts be reconciled once a month to help ensure maximum protection.

What Are Some Common Scams Used in Targeting Businesses?

Some of the most common scams that target companies include:

Fake bills for merchandise or services that haven’t been ordered or provided
Paying for nonexistent advertising (this can include online listings)
Impersonating a government employee
Impersonating tech companies–usually warning about a “problem” with your computer’s security settings
Phishing
Ransomware
Check washing

How Can You Report Business Fraud?

First, as soon as fraud is suspected, you should let your supervisor know. If it involves phishing or ransomware, your IT department should also be notified.

Beyond that, you can report business fraud to the Federal Trade Commission

It’s worth noting that sometimes scammers will contact you pretending to be from the Federal Trade Commission, threatening you or suggesting that you send money. Don’t be deceived. Go to the official government website to get your information.

Can Outsourced Accounting Reduce the Risk of Fraud?

Yes, it can, and at CAP3:Reveal, we provide the objective scrutiny you need. Remember, you’re much more likely to be the victim of fraud if you rely on just one or two employees to manage your accounting.

When you outsource to CAP3:Reveal, you have an entire team supporting your efforts.

In addition, there are also incidents where your employees could make an honest mistake. An outside firm like CAP3:Reveal carefully reviews your finances, minimizing the factor of human error.

To Protect Your Business From Fraud, Enlist the Trusted Services of CAP3:Reveal

When you choose to partner with CAP3:Reveal, you get much more than an accounting firm; you get a dedicated team that lives our core values of Empowerment, Diligence, Generosity and Excellence. We call it the CAP3 EDGE, and we’d love to show how it can work for you.

We would love the opportunity to speak with you and discover how we can help safeguard your business against fraud. Simply contact us for a consultation.

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Sources:

Association of Certified Fraud Examiners, “Key Findings,” https://www.acfe.com/-/media/files/ACFE/PDFs/RTTN/2024/Infographics/Key-Findings.pdf

Federal Trade Commission, “Scams and Your Small Business,” https://www.ftc.gov/business-guidance/resources/scams-your-small-business-guide-business

Florida Atlantic University College of Business, “Occupation Fraud,”https://business.fau.edu/centers/center-for-forensic-accounting/public-resources-on-fraud/fraud-in-businesses-and-non-profits/occupation-fraud/