Fighting Small Business Fraud

It’s not surprising that fraud in the workplace increased during the economic crisis and recession. The median loss tied to occupational fraud is $160,000, according to the Association of Certified Fraud Examiners’ (ACFE) 2010 report, so the issue is something about which many companies are rightfully concerned. Small businesses are especially vulnerable, the ACFE says.

Fraud typically occurs when someone has an incentive, such as financial pressure, and opportunity, according to Michele Edwards, who heads the fraud prevention and detection practice of PRGX, a Chicago-based audit, analytics and advisory services firm. The recession certainly meant many people faced new financial pressures.

Previous studies have shown that it typically takes two years from the time fraud begins to the time someone identifies it might be going on, Edwards said. As a result, while some companies have already discovered fraud born of the recession, many more are likely to uncover problems in upcoming years. “I think there’s more fraud going on than anyone knows about,” she said.

 

 

Fraud can pad your selling, general and administrative expenses or inflate your cost of sales. Here

are five ways to fight fraud in your business:

 

1. Confirm who’s doing fraud control. “Do a quick and dirty assessment of fraud control,” Edwards says. “One of the questions I always ask [clients] is, ‘What are your responsibilities for fraud and misconduct management?’” It can be a working group, but someone needs to quickly identify areas that may need action.

 

2. Screen and monitor those who touch or track money. Background checks are a must for accounting workers, and division of labor is also a good idea, especially for things like who gets the mail and who deposits checks.

 

3. Conduct basic fraud-awareness training. It can be as simple as getting employees together and explaining that fraud can occur in any organization and describing what they need to know and how

they can speak up if they see something unusual. “It’s Awareness 101, and it lets employees know that you’re watching,” Edwards says.

 

4. Periodically remind employees to be vigilant. Edwards says how you do that depends on your company’s culture. But it could be as simple as e-mailing the staff a news article about a recent case of occupational fraud.

Black Friday Strategies

Add some strategy to your ‘Black Friday’ shopping

 

If there’s anything more satisfying than melting into the couch following a multi-course Thanksgiving dinner complete with all the fixings, it has to be shopping for the best deals of the season the day after in Eau Claire.

 

Hitting the shops on Black Friday has become a ritual that is as all-American as watching fireworks on the Fourth of July. And why wouldn’t it be, considering what a win-win it is for Wisconsin’s customers and retailers alike? 

 

Over the years, however, Black Friday has evolved. Stores that used to open at 6 a.m. now open at midnight, and Cyber Monday has entered the picture, offering bargain prices online the Monday following Black Friday. All of this means that getting the best deals now requires a bit of strategy. 

 

At Mower Insurance, we want you to get the best deals for your holiday shopping, so here are a few pointers for maximizing your experience.

·         Be willing to forego the shut-eye. It’s a fact: stores open early. Accept that you will not get eight hours of sleep Thursday night (and remind yourself that your wallet will thank you).

·         Do your research. Go online before the holiday and note who has deals on what and when. Remember to factor in your opportunities for Cyber Monday.

·         Pick your favorites. You probably won’t have time or energy to go everywhere, so narrow your shopping store list down to focus only on your favorite stores or those that are offering sales on exactly what you’re looking for.

• Create an itinerary. Before you go, make a list of stores in order of priority based on times they open and items you want to snap up.  Then, map it so you know your route.

From the Mower Insurance Agency, Inc. to you, we wish you a very productive and enjoyable Black Friday!

 

Fun fact:

 

Considered as the kick-off to the Christmas holiday season, Black Friday is often described as the busiest shopping day of the year. This has been true since 2005. The millions of Americans who shop on Black Friday have been keeping the streak alive for nearly seven years.

SMALL BUSINESSES MUST BE PREPARED FOR DISASTERS

“Small businesses are particularly vulnerable during disasters,” said Diana McClure, Institute for Business & Home Safety business resiliency manager. “Statistics show that, of the small businesses that are forced to close due to a disaster, at least one in four never reopens. The reality is probably higher than that, because most statistics just cover the first two years, and some businesses hang on for two to five years before they give up.”

The IBHS defines a disaster for a small to mid-sized business as that point in time after the ‘cause’ when a small business cannot provide its customers or clients with the minimum level of goods and services they need and expect, or an event that shuts down or severely disrupts delivery of products

and services essential to the business and its clients.

“That event can be a natural disaster, an intentional or unintentional human-caused incident, a technological failure, pandemic flu or high absenteeism (no matter what the cause), or a product recall,” McClure said. “A loss is a loss, whatever the cause. The business continuity planning process and disaster preparedness methodology are basically the same no matter what the cause of the interruption.”

The IBHS offers the following do’s and don’t to small businesses during the business continuity planning process:

Do the following

1. Vulnerability Assessment: think about what might threaten your business — whether a natural, man-made or technological incident — and what the consequences might be.
 
2. Mitigation: determine what you can do ahead of time to minimize or eliminate the damage or disruption that could occur as a result of an event — to people, property (building, contents, inventory) and business operations.

3. Emergency Response: create procedures for effective response, i.e., plan your action steps to get through the chaos immediately following an event, including your methods of communication.

4. Disaster Recovery: have procedures in place for recovery of IT systems and data.

5. Business Continuity: plan for resumption of your critical business functions and processes.

Does Personal Auto Cover Business Use?

 

 

Your personal auto policy provides coverage for some business use of your vehicle. Similarly, your employees’ personal auto policies cover some business use of their vehicles too.

 

A personal auto policy is unlikely to provide coverage, however, if the vehicle in question is used primarily in business. It will not provide coverage for any vehicle owned by a business. The personal auto policy, whether yours or your employee’s, may not have enough coverage to protect your business.

For example, imagine you are driving your car to a business meeting while having an intense conversation on your cell phone with one of your sales reps. By the time you notice a van ahead of you has stopped to make a left turn, it’s too late to avoid a collision. The driver and five passengers
are injured in the accident. They sue you and your company. If you have only a personal auto policy, your insurer will probably defend you personally and pay the claim — up to the policy limit. Your personal auto policy insurer will not defend or pay damages on behalf of your business, however.
 
For a very serious accident or one with a number of injured people, your personal auto policy may not be enough to cover the damages. In that event, the injured parties would likely sue to collect damages from your business.
If you or your employees are driving personal vehicles on business and relying on your personal auto policies, be sure you and they have sufficient liability coverage to protect your business in the event of a serious auto accident.

Do not expect to rely on a personal umbrella policy for any claims that arise from business use of a vehicle. Typically, the personal umbrella excludes all claims occurring in the course of a business endeavor.