If you live in the UK, chances are you know someone who has experienced or been a victim of fraud.
It can seemingly happen to anyone, all it takes is an innocent click on the wrong email or an unsuspecting phone call from ‘the bank’ and you’re at risk. With an estimated 3.5 million fraud related incidents in 2018, we now have to be more vigilant than ever when it comes to protecting our data, our money and ourselves.
According to a report released by the Crime Survey for England and Wales (CSEW) in January 2019, fraud accounts for more than 30% of crimes nationwide. Of the 20.6% of individuals surveyed who said they had been victims of crime, 6.3% of them had experienced fraud. This is evidence of the changing criminal landscape in the UK, with fraud outscoring every other offence type by almost 15% of the total share.
As a society, we typically picture theft, damage and violence as the most commonly occurring criminal offences, however, this is no longer the case. CSEW’s year-on-year reports tell us that fraud has been the most consistently encountered crime in the UK for the last two years, and as such, we need to consider better protecting ourselves and our business from potential fraud.
Types of fraud affecting small businesses
Common types include but not limited to:
- Bank account fraud
- Cyber fraud
- Data theft
- Fake suppliers
- Inventory theft
- Payment fraud
- Procurement fraud
The statistics tell us that we need to do more than just be aware of possible fraud and potential scams. With the migration of so much information to digital platforms and the cloud, we need to re-evaluate our approach to online safety and data protection and stay vigilant when it comes to the threat of phishing and cyber fraud.
At Berley Chartered Accountants, London specialists for entrepreneurial businesses, we understand the importance of protecting your business from fraud, which is why we want to share tips on how to safeguard your company and its data.
Protect your data, use the cloud
With the imminent introduction of HMRC’s Making Tax Digital Scheme, migrating to digital, cloud accounting is on the horizon for all UK businesses. This transition comes into effect on 1 April 2019 for the approaching 2019/20 financial year, so there should be no excuse as to why you aren’t migrating now. Cloud accounting represents one of the most effective and efficient means of protecting your data and financial information and is a fantastic measure that your business can take to safeguard itself from fraud.
Not only does cloud accounting software facilitate seamless communication between business and accountant, but many providers also use sophisticated encryption technology to protect your data both when it is stored and when it is being transferred. This means that any attack or attempt at defrauding you is rendered moot. At Berley, we do the utmost to protect client data and have been using Xero the cloud accounting software, which encrypts your personal and financial data using industry-standard Transport Layer Security, for years.
Encrypt the important stuff
If your business manages sensitive information or holds a high volume of personal client data, then consider using a localised encryption software to protect yourself against fraud or a cyber-attack.
With a variety of intuitive and intelligent encryption software on the market, protecting your company’s sensitive data should be a straightforward and simple affair. This technology allows you to create encrypted storage on your computer, as well as encrypting files, folders and sometimes text. Moreover, there are platforms with public and private password decryption and some with two-factor authentication for added protection.
Keep a back-up
Not only is it good practice to back up your data to the cloud in the event that you need to restore previous versions of files, but a stored copy of your system should also be kept on a hard drive in case of emergency. An external back up hard drive will mitigate the potential damage of ransomware as you can load the existing files from the external source once the virus has been extracted and reboot without the fear of losing your data.
Don’t surrender to pressure
Fraudsters like to apply pressure on their victims, imposing time constraints and threatening some dire consequences if you don’t act right away (like if you don’t download a piece of software right away or transfer the money straight away). Tell them instead that you want to check out if the process is genuine. If they continue to pressure you, discontinue the discussion because a genuine company is not likely to behave that way.
In 2018, only 1 in 8 people who were victims of fraud reported this to authorities. That means that roughly 13% were reported overall, leaving 87% to go without investigation and potentially leaving the perpetrator to repeat their offence.
If you are unlucky enough to fall victim to fraud, reporting it ActionFraud. Many reluctant to report because police only get involved if they believe the fraudsters are from an organised network who have stolen a large sum of money from multiple victims. Nonetheless, reporting it usually will help other businesses become aware of the specific type of fraud you’ve experienced.
Trust your accountant
Keeping a close eye on your books is one of the most effective ways to prevent fraud within a business, and outsourcing your business’s financial accounting to a qualified, trusted accounting firm is the best way to do this. Our team of chartered accountants specialises in small business and start-up operations, and have been serving entrepreneurs across London for years. Please give us a call to discuss how we can help your business reach its full potential and profitability.
Perform background checks
Embezzlement or other types of fraud committed by employees can cause significant damage to your small business. Use background checks to see if you can uncover any ‘red flag’. Beware that due to GDPR, you need to tell the applicants and/or your existing employees what data are being collected, why and how they are being used.
Berley Chartered Accountants
Founded by entrepreneurs, at Berley Chartered Accountants, our mission is to serve entrepreneurs and start-ups across London on matters pertaining to:
In addition, we also help small businesses on business finance solutions, funding options and restructuring. Give us a call on 020 7788 8261 today. We look forward to discussing business with you.