As technology changes, so do the methods people use to defraud businesses like yours. Unfortunately, business fraud is most often an inside job.
It’s estimated that 57% of fraud cases are committed by an employee working with someone outside your company. These could be people you rely on, such as vendors, bank employees, outsourced service providers, or anyone known to the employee.
A fraud investigation can reveal the person or people committing the fraud. Fraud comes from senior or middle management. Or it can be entry-level employees.
You may be asking, how does fraud detection work? In this guide, we’ve provided five warning signs you need a fraud investigation in Beverly Hills.
Keep reading to learn what you should look for to detect fraud.
What is a Fraud Investigation?
An internal fraud investigation is based on evidence or an accusation of fraud. The goal of an internal fraud investigation is to find out if there was fraud. If so, who did it, and what kind of money was lost or stolen?
1. Unusual Cash Transactions
It’s important to look out for significant discrepancies between what you expect in cash and what you get. Don’t just jump to conclusions if you see a pattern. There are a lot of cases of people stealing money by writing checks for themselves and signing them with their employer’s name.
2. Vendor Kickbacks
A common type of fraud is a bribe from a supplier or vendor. As high inflation hits, it’s expected that prices will go up also. Vendors will experience a rise in costs they’ll pass on to clients.
Pay close attention to communications regarding price increases and ensure your statements align with the new costs. It may also be an excellent time to perform a cost analysis with new vendors
3. Fraudulent Documents
Keep an eye out for suspicious-looking paperwork like invoices, purchase orders, checks, expense statements, time cards, etc. Sometimes, criminals may even create fake employees and collect their salaries.
Make sure you audit payment processes and bank statements
4. Employee Travel Reimbursements
Travel reimbursements are another area that can quickly be taken advantage of. If you aren’t paying attention, it’s easy for someone to forge these records. Make sure the receipts match all the details of the travel expense reports.
It’s also important to outline what expenses are reimbursable and policies on repayment of uncovered expenses.
5. Checks and Balances
Today’s technology makes it easy to forgo traditional checks and balances. Separating duties between accounts, payables, and receivables is vital.
These tasks should be split up and assigned to different people. It would help to have a third party outside your business to audit your financials regularly.
Do You Suspect Fraud?
Every business owner wants to trust the people they hire. You need fraud investigation services when you suspect that trust has been broken.
Najar Investigations has years of extensive experience in dealing with fraud. You can trust us to uncover signs of fraud within your Beverly Hills business.
Contact us today to get a quote.