5 Ways Your Accountant Can Help You Prevent Fraud
Has your business been a victim of fraud?
A couple of years ago, a cloud accounting client forwarded us an email that they had just received from a Police Officer in another state. That police department was investigating a check that an individual was trying to cash that was flagged as fraud.
First, we called the police department via a number we found publicly to verify that the person who had sent the email was in fact a police officer. Then, the officer sent us a copy of the check.
The company name & address in the upper left corner was our client’s correct information, but the payee name and dollar amount matched nothing in our records. The check had been altered!
Over the course of the next hours, we received similar reports from other states about checks that matched nothing in our system. One for $1978 in Washington, another for $2300 in Georgia, then $7812 dollars in Mayland, and eventually even one for $450,000 again in Washington.
A check had been stolen, washed, duplicated and used in mass all over the country. Local police stepped in and led an investigation with all the various precincts around the country that were involved in this case. The fraud attempts continued to happen, fraudulent checks attempting to be cashed over the next several MONTHS.
In the end, the lead detective sat down across a conference table from me (and the client and their legal and security team) and confirmed that the reason not one penny was ever stolen was because of our online bookkeeping fraud preventative features.
Our client was safe, but beware of check fraud.
In another instance, we received an email from an existing client authorizing a payment by wire to one of their vendors. It was for a large amount, but not out of the ordinary ($1.4 MILLION). It had a trail of emails below where the vendor had sent the supporting documentation.
We called the client to confirm the wire, and we discovered that the client knew nothing about this wire!
Upon investigation, we found that the sender’s email address was very similar to our client’s email domain. The criminal had added one letter in the domain name that was barely noticeable.
In addition to the fraudulent wire request, they had tapped into this business’ secure email account. This way the email had the actual employee names, email addresses, and project names.
Beware of email fraud – known as Business Email Compromise (BEC).
Hopefully, these stories mobilize you to protect yourself from any of this happening to you.
Here are 5 ideas that you can implement today to keep this from happening to you:
#1: Establish secure procedures
- Document procedures
- Identify and solve vulnerabilities
- Use checklists
#2: Separate financial duties
- Split procedures into smaller parts
- Delegate to different staff
- Manage user access
- Require review & approval
#3: Send payments securely
- ePayment
- Hidden bank account info
#4: Monitor bank activity
- Bank statement
- Bank alerts
- Bank feed
#5: Take advantage of technology
- Integrated
- Automated
- Secure
We’d love to be your virtual accounting department and help you prevent fraud.
Schedule a complimentary consult so we can learn more about your business’s needs.
