The Expert Podcast

…So if you're a company owner or manager, And you want to prevent fraud One of the most common areas you'll find it is in fake payable invoices being paid, where money's being diverted from your company. So how do you discover those while the most common method of fraud being fake payable invoices requires that somebody sets up a fake. entity to receive these checks. It's usually employee activity somebody in your company that knows how payable. being processed, how checks are being written. So they have some knowledge of how to have those invoices presented to the company. It could be a client or vendor but it's usually an employee. The first place to start is the addresses that are appearing on your invoices, matching them up with first of all employees, if an address onto the invoice is the same as your employee HR file That's a red flag. Most employees who do this will have a separate address And then you want to look at your addresses on your payables to see. are they going to a PO box? Are they going to a mailbox type store ups store? It doesn't necessarily mean that it's fraud because some small companies use these mail locations to receive their mail, but it's a place to start. Also audit your new vendors 60 days after they've been onboarded to make sure that they're legitimate. Then take a look at the endorsements on the back of your checks. Are they being stamped as a company normally would are they being hand signed? And maybe signed over to some. else. Verify the EIN numbers or the tax ID numbers of your vendors to make sure they're associated with a business and not a person. You can also take a look at the names that are on the checks with your secretary of state records to make sure these are legal entities, whether it's a DBA and LLC or a corporation to make sure these are legitimate companies, you're writing your checks to. These types of very basic audits will eliminate 80 or 90% of potential fraud from your company to have no money being diverted We've seen examples where companies have lost hundreds of thousands of dollars over the years, sometimes over a million dollars. Because fake invoices are being presented. And the way that they're being brought into your company matches the acceptable flow of incoming mail of invoices being approved by managers, to where that money freely goes out of your company that could be used for other more productive things…