Kontrol Payables Journal

All Together Now: Combating Payment Fraud Takes a Team Effort

Posted on Jan 18, 2018 1:32:20 PM by Tom Parrish


Payment fraud is one of the most pressing dangers that organizations routinely face. The stakes are incredibly high: If you aren't careful, your organization may quickly lose thousands - even millions - of dollars to payment fraud. And though no executive expects to encounter fraud at the hands of a business partner or client, one should always be prepared for it. Your employees should be fully trained to recognize security risks, report them and take measures to combat them. This is one initiative that is truly a team effort.

Fraud Can Begin in the Office

Internal theft within your own organization is one of the worst manifestations of payment fraud. These types of attacks are usually conducted silently, right under your nose. Identifying embezzlement and other forms of theft can be particularly difficult when it comes from within your circle of trusted employees. Those who feel overworked, underpaid or ignored may be take their feelings out on your organization by embezzling. To thwart this possibility, be proactive in your approach to structuring financial transactions for your business. For instance, no one employee should be in charge of collecting and tallying up cash and then taking it to the bank. These are functions that should be handled by three separate employees, in order to minimize the possibility of theft.

Always Be Vigilant About Hackers and Phishers

Not all threats will come from within your own office. Hackers, phishers and corporate spies are often behind the most pervasive form of payments fraud: cybercrime. Your employees should always be on the lookout for suspicious activity on the web. That means properly preparing and educating them on this threat, while arming them against it. Educating employees to recognize phishing attempts is a vital part of protecting your organization against fraud.

Workplace Security Extends to Your Internet Activity

Every activity that your staff performs on the Internet, from responding to emails to logging invoices, should be done with an eye on security. Small mistakes can lead to a massive and costly case of fraud, so be sure that your employees know to handle every operation in a secure fashion. This includes small details, such as keeping business passwords completely private and changing them often, as well as choosing complex passwords that are more difficult to crack. You can also monitor the computer activity of your employees, in order to make sure they are not visiting potentially hazardous sites or using the messenger system to plan criminal activity. You may even invest in a web filter, which protects against hazardous sites with an organization-wide security position that works for you and your business.

Foster a Culture of Ethics

You should always have an “watchdog” system in place at your organization, and one way to do so is by encouraging a culture of ethical behavior amongst your employees. This means having an open-door policy for the reporting of ethics concerns and rewarding employees who detect, report or prevent fraud. If your employees are educated on the various types of fraud that can occur within a business setting, they will likely be more vigilant for it as well.

Most Cases of Fraud Will Be Detected by Your Employees

According to a report recently issued by the Association of Certified Fraud Examiners (ACFE), over 40 percent of occupational fraud is uncovered thanks to a tip from an employee. Every transaction that occurs at your workplace, from making a sale or purchase, to registering the associated invoice, should be fully documented and witnessed.

Combating theft is a team effort. Treat your employees with respect, reward them for uncovering fraud, and they will continue to look out for your business. We care about your organization’s security, as well. Give us a shout if you have any payments fraud concerns.

Photo by Paul Bence on Unsplash

Topics: Payment Fraud, security