7 Things You Should Do As Soon As You Suspect Fraud

There are many things that can be considered a nightmare for a business owner – low-profit margins, bankruptcy. But, amongst those is the reality that one of your employees is committing fraud and using your business to do so. Unfortunately, it is something that can happen, and you’ll have to deal with it if you come across it. Luckily for you, our Heidelberg accounting firm has formed this list of what to do when you suspect or come across fraud happening in your own business.

1.    Don’t panic

Whatever you do, do not overreact. You must keep a level head if you ever find yourself in this sort of situation. The last thing you want to do is make decisions when you yourself are in an emotionally heightened state. This is why you must stay calm – so the following decisions you make can be made with a rational mind.


2.    Gather evidence

If you suspect fraud, then you should investigate these suspicions. If you come across evidence that triggers your suspicions, then that’s even better – but you should still try to find as much as you can. Restrict the suspects’ access to certain parts of the business, especially the ones that relate to the fraud you think they’ve committed. Don’t let them take their computer home or do anything that’ll make it harder to gather evidence. Try to resist the temptation to confront the person(s) you suspect without gaining the evidence, this links back to the first point about keeping a level-head.


3.    Safeguard the evidence

Make sure the evidence is kept safe as you’ll need it to prove your case when it comes time to take action. If it’s physical information, then perhaps taking it home with you or keeping it in a safe. Making photocopies or digitising the files is a good idea as well. If the evidence is digital, then make sure to keep the files on you at all times or in a safe on a USB or hard drive. The less chance there is of the files going missing, the better.


4.    Enlist help

Whilst it may be tempting to go to a friend within your company that you know you can trust; it is recommended to talk to an external fraudulent expert. An expert will offer a fresh, objective perspective on the matter. They’ll also be able to offer better advice as it is their area. One area you’ll want to establish the specifics of is how to go about the investigation further to make sure you’re not breaching the legal rights of any of the suspected employees. An employment lawyer is another good option for understanding the legalities of this part.


5.    Confront the suspected employee(s)

After sufficient evidence has been gathered and you’ve identified what sort of fraud has been committed, you may confront the employee(s) you suspect of fraud. Remember to be calm in this situation. They will most likely deny the accusations. This is where you reveal the evidence you’ve gathered to them. Don’t let them talk their way out of it, if you’re confronting them then it’s because you know for a fact that they did it.


6.    Find out why

Whether it was because they’re having a hard time financially or it was a purely malicious move, you deserve to know why your company was being used as a conduit for your employee(s) to commit fraud. It probably won’t make what they did any better but depending on the reason and the level of fraud committed, you may find yourself going easier on them. This is entirely up to you as it is your company.


7.    Reporting the fraud

It is strongly recommended that you report any fraud to the relevant authorities. Present all the evidence you have gathered and be specific about the details. Usually, it is your State Police department that will deal with fraud within private businesses. Depending on the size of your business you may have a department that deals with fraud specifically. You would refer this to them as soon as you suspect that fraud is going on and work with them group the above steps to resolve the issue.


Looking for an accounting firm in Heidelberg?

If you suspect fraudulence in your business, then Silverdale Consulting Group is the Heidelberg accounting firm for you. We specialise in a variety of accounting and business services including fraud investigations.

If you suspect there’s fraud going on in your business, then please give our Heidelberg accounting firm a call on (03) 9497 5885 or send us a message through our website here.