Fraud does not only affect large organisations. Smaller businesses can be particularly vulnerable because financial controls may be less formal and employees may perform several different roles.
One significant risk involves criminals impersonating suppliers and providing replacement bank details. An apparently genuine email may request that future payments are made to a different account. If the change is accepted without independent verification, substantial amounts can be lost.
Artificial intelligence is also making fraudulent communications increasingly convincing. Poor spelling and unusual language can no longer be relied upon as warning signs.
Businesses should establish straightforward controls. Changes to supplier bank details should always be verified independently, preferably by speaking to a known supplier contact using a telephone number already held rather than one contained in the request.
Significant payments could require approval from two people. Employees responsible for payments should also be encouraged to question unusual requests, even when they appear to come from senior management.
Internal fraud should not be overlooked either. Wherever practical, responsibility for ordering goods, approving invoices and making payments should not rest entirely with one individual. Bank accounts and management information should be reviewed regularly so that unusual transactions are noticed quickly.
Access to accounting systems and online banking should also be removed promptly when an employee leaves.
No system can eliminate fraud completely, but a few simple controls applied consistently can make a business much harder to deceive.
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Published by The NAS News Team
