Is Your Business Fraud-Proof?

No small business owner wants to believe that their profits could be disappearing under the table – and certainly not by employees they trust. The Association of Certified Fraud Examiners’ (ACFE) 2014 Global Fraud Study revealed that organizations lose a median of 5% of revenues each year due to business fraud. And it’s not just revenue.

Businesses also suffer indirect costs, including decreased employee morale and productivity as well as effects on their brand and reputation. Bigger companies have learned that if they want to succeed, they have to do the things necessary to prevent fraud before it happens.

As a small business owner, you may have limited time and resources to dedicate to the cause, but with even just a little effort, you can take the following steps to fraud proof your business just as effectively as the big guys:

Hire competent & trustworthy employees.

Learn as much as you can about a potential employee’s character through background checks (criminal history, civil history/fraud-related lawsuits) their employment history, education and references.

Implement internal checks & balances.

When two or more employees are responsible for the financial duties, it helps to eliminate the risk of a single employee embezzleing funds without anyone noticing.

Perform audits.

Periodic audits, whether scheduled or unscheduled, are the best way to detect and deter fraud. Schedule an external audit at least once a year.

Implement an anonymous reporting policy.

Create an environment where employees can feel safe to anonymously report suspected incidents of fraud within your company without feeling like they are risking their job or peer relationships.

Enforce mandatory vacations.

An employee who never takes time off work is a red flag for fraud. Safeguard your company by implementing a policy that requires all employees to take at least five consecutive days of vacation each year.

Take Security to the Next Level with Sage 50

Sage 50  has features that are designed to help you protect your business:

  1. Built-in audit trail – Keep a transaction history so you can see when a person enters, edits, or removes data. This not only helps you find mistakes and determine appropriate employee training, but also alerts you to fraudulent activity that may require action.
  2. User profiles – Specific profiles will ensure employees only have access to certain areas. If you have a lot of employees, create role-based profiles to save time.  Either way, select from over 100 specific areas to give add, edit, view-only or no-access rights. To get there, go to System -> Set Up Security Now.
  3. Internal accounting review – This feature searches data for potential mistakes or fraudulent activity and allows you to generate comprehensive reports. To use this feature, go to System, in the Data Integrity section find Internal Accounting Review and click on Run Report.

When it comes to preventing fraud, it’s your job to foster a culture that places an importance on honesty and integrity. Don’t take a lax approach. Your employees are watching you; set an example as a leader and stick to the policies and procedures put in place. This will help everyone get on the same page when it comes to preventing and eliminating fraud.

 

 

photo attribution: © tashatuvango/depositphotos

Risk Management Matters

As a small business owner, you should be prepared to expect the unexpected. Don’t be one of those people who learn about risk management the hard way…it’s important to understand that all businesses (yours included) have risks.

What is Business Risk Management?

There are many things that can impact the health and operations of your business. While you can’t predict the future, one of the best ways for you to manage risk is to evaluate risk factors and make contingency plans on how to deal with the risk if/when it comes up.

Risk management is the process of identifying, prioritizing and reducing or eliminating risks. When you identify risks before they occur, you’ll better react to certain problems and feel confident when it comes to putting a solution in place.

Where Do You Start?

If you want your business to succeed, it’s imperative that you have a risk management plan in place. If you don’t, set aside a day or two sooner (rather than later) to identify risks surrounding the activities of your business. Ask yourself what if…

  • A personal or family emergency takes me away from my business for an extended period of time?    
  • A trusted employee steals from me or my business?   
  • Someone is hurt by a company vehicle driven by an employee?    
  • My largest customer decides to no longer do business with me?  
  • My largest supplier can no longer fill orders?    
  • I lose my bank line of credit or loan?
  • I am part of a lawsuit?
  • Your data or company information is compromised?   
  • A fire, flood or other disaster destroys my business?  
  • I lose an employee or manager to a competitor?
  • I become a victim of fraud?  

If any of the situations listed above happen to you, it can wreak havoc on not only your business, but your reputation and credibility. That’s why it’s so important to take the time to define, assess and prioritize risks as they are related to your business. Enlist the help of outside experts to help you in this process. Then, take it one step further by documenting and implementing a risk management policy.

Assess and evaluate your risk management policy at least once a year. As business needs change, so do the possible risks associated with it. Remember…it’s your job to protect you business. If you don’t do it, who will?  

 

photo attribution: © stevanovicigor/depositphotos

Advanced Security Controls for Sage 50 Accounting

Using the Built-In and Advanced Security Controls Within Sage 50 Quantum

There are several standard features in Quantum that keep your business running securely: automatic data backup, account reconciliation, and system alerts (e.g., letting you know when credit or purchase limits are reached).

However, there are a few other features you might not be using.

We all want to trust our employees, but we still need to take precaution to protect the business.  Sage 50 has a built-in audit trail that will generate logs of transaction history to allow you to see when a person enters, edits, or removes data. If you find mistakes, you’ll know to provide additional employee direction; if you find fraudulent activity, well… you can take appropriate action.

You can further limit risk by creating user profiles to allow access only to specific areas in Quantum.  You can create that for each individual employee, right down to the screen level if you need to. Or if you have a lot of employees, create role-based profiles to save time.  Either way, select from over 100 specific areas to give add, edit, view-only or no-access rights. It doesn’t take long to set up.  To get there, go to System -> Set Up Security Now.

The internal accounting review feature searches the company data for potential mistakes and fraudulent activity for you.  There are multiple system checks available and if any trouble is spotted, a comprehensive report is generated to help you to take appropriate next steps. To use this feature, go to System, in the Data Integrity section find Internal Accounting Review and click on Run Report.

With security features built into Sage 50 Quantum you can sleep better at night because you’re taking care of business.  Plus, you know the business is secure with built-in security checks, comprehensive audit trails, module- or screen-level security and role-based security controls.

What To Look For When Selecting New Accounting Software

Over the years we’ve helped a large number of customers choose the right software solution for their business.  So we know a thing or two about selecting new accounting software and we’re pretty good at helping you figure out what you need too.

Needs Assessment and Priorities

Develop a list of must have features and like to have features.  A software partner should be able to help you narrow this down and prioritize the features absolutely vital to your business’s success.  Ask for a needs assessment from your vendor to help you assemble and organize your list.

Ease-of-Use

Of course there will always be a week or two for a learning curve, but whichever software you end up with needs to be easy for you to use or you’ll days will soon become nightmares.

I’m not just talking about a pretty interface either.  Are reports simple to run? How many steps does it take to enter a deposit?  Can you run bank reconciliations while managing other tasks?  Are there too many features you don’t use that makes the software tough to manage?

Functionality

If you run a distribution company, you more than likely need a solution with features specific to your business (like advanced inventory management and reports necessary for you to run an efficient business).  If you’re in manufacturing, look for a solution with control and tracking of assembly jobs.

Industry Requirements and Regulations

If you’re looking at software that claims to be made “just for your industry,” make sure it’s up to speed on all industry regulations.  For instance, if you take credit card payments, you need to make sure the software is PCI compliant.

Compatibility

Make sure your existing set-up (current hardware, network, any software that should integrate with your accounting solution, etc.) is current enough to be able to handle your new software requirements.  Or, if it doesn’t, make sure you have the budget necessary to cover the improvements to your system.

Most solutions list all the system requirements on their website or on the product box, but any software partner or vendor should be able to also help you determine if everything will work happily together.

Usability

Do you need access to features on the road? Do you need to be able to view inventory from your iPad?  Make sure your solution works where you do.

Longevity

Check to make sure the software manufacturer is financially sound and committed to its product.  You don’t want to be left without program support next year and have to start all over again.

If you are just starting to look for new accounting or ERP software and have questions or would like a free software needs assessment us at 866-686-1329 or e-mail us today at sales@quantumbuyers.com.