The possibility of business fraud is the dirty little secret that business owners tend to ignore. Unfortunately, there will always be unscrupulous individuals that try to take what is not theirs, even during hard times. Recent reports of bookkeeper fraud serve as a reminder to business owners that fraud never stops, even when businesses are down on their luck. In fact, a global fraud study found that, on average, companies lose 5% of their yearly revenue to fraudulent activities.
While it is easy to imagine fraud occurring by faceless cybercriminals or strangers sneaking in to rob your company of cash and valuable assets, most perpetrators have deep ties to the business, and many are first-time offenders. Many times, the people you least expect are the ones responsible for fraudulent activity – long-time employees, close friends, and even family. These bonds can make it difficult to spot the warning signs, causing fraud to go undetected far longer than it should.
During a recession, too many organizations try to cut costs indiscriminately. The savviest organizations, however, lean on the data to determine when to trim and when to ramp up spending to capitalize on new opportunities. A Harvard Business Review study from the 2009 recession showed that companies that strategically increased spending sooner actually weathered the downturn better. Shrewd business owners who knew when to cut and when to spend recovered lost revenue more quickly and positioned their businesses better for long-term success.
Companies that do not currently employ an accountant may be hesitant to hire one during this downturn due to the expense associated with doing so. However, some circumstances call for an experienced accountant, and a recession is one of them.
Once reserved for large corporations and technology pioneers, non-disclosure agreements (NDAs) are becoming more common across all business types, sizes, and industries.
In an era where business trust is at an all-time low, even among fellow companies, businesses are using NDAs both internally and externally to protect their interests. Daliah Saper, intellectual property attorney explains,
Businesses in Washington should be aware of a possibly fraudulent letter claiming to be an official bill for annual business registration fees.
One letter received by an Edmonds-based business directed the business to send $121.86 to a post office box in Olympia. The letter stated, “your state annual report will not be filed until payment is received.”
The misleading letter did not include the Office of Secretary of State logo, as an official letter from the Office of Secretary of State would - see the example pictured above.
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