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Common Business Frauds to Lookout For

Fraud and cyber attacks are becoming more sophisticated, taking advantage of business vulnerabilities and causing significant damage to businesses like yours.
December 5, 2022

Prashant Bhople

| Senior Web Developer
Home » Blog » Common Business Frauds to Lookout For

Running a business is challenging enough when things go well. But when you run a business, unexpected things do happen. You have to be ready for anything that can happen, including fraud.

The new business environment brings with it new challenges. On the one hand, you understand that achieving digital growth is critical to meeting today’s customer expectations. On the other hand, as your company grows digitally, you must be cautious of its vulnerability to fraud.

According to a recent report, small businesses with fewer than 100 employees suffer a median loss of $154,000 due to fraud. This figure is higher for small businesses than for most large corporations.

Fraud and cyber attacks are becoming more sophisticated, taking advantage of business vulnerabilities and causing significant damage to businesses like yours.

In this article, we’ll discuss what business fraud is and how it can affect your business. We’ll also discuss why cloud-based solutions like Utiliko are essential in today’s business environment.

What Is Business Fraud?

The definition of “business fraud” is broad. It can be used to describe offenses done by top-level personnel of a business or it could be used to describe attacks on the businesses themselves.

In the end, business fraud almost always involves someone stealing money from someone else while acting like they are doing business.

It’s a big problem in either scenario. That is why it is critical to be aware of the various types of fraud in business today.

Employees and customers are just two examples of people who may exploit your small business. Recognize different types of business fraud and learn how cloud-based business management platforms like Utiliko can help protect your business interests.

How Cloud Systems Can Protect Against Business Fraud

Your company may have some tools and apps to help protect itself from common types of business fraud. However, most existing tools are complex, customized, and do not integrate well together.

Some businesses use dozens of tools from various vendors! Needless to say, this only adds to the complexity of your IT stack and gives you too much data to deal with.

Cloud-based business management platforms, such as Utiliko, have grown in popularity among businesses. This is largely due to its convenience, cost savings, and flexibility in usage.

Utiliko helps to simplify fraud prevention efforts and to establish digital identity trust. This helps to provide frictionless, continuous authentication throughout the user journey, which results in a positive user experience.

Types Of Common Business Frauds

Here are a few examples of common small business fraud. We’ll also demonstrate how Utiliko can provide practical solutions to protect your business.

Identity Theft

Identity theft could very well cost your company thousands of dollars. Fraudsters could steal your company’s identity and use it to gain access to your credit.

Federal tax identification numbers, bank statements, and financial details could all get into the wrong hands. Your computer may be used to directly access information.

Most cloud storage systems use sophisticated encryption techniques. Individuals and businesses alike can protect themselves from the risk of a data security breach by storing all sensitive data on a secure cloud network.

Even with encryption, however, data is only as secure as the user makes it. A single forgotten password or passphrase can bring the entire system crashing down.

Utiliko’s staff of IT experts is available round-the-clock to ensure that your systems are being carefully monitored.

Payroll Fraud

According to industry studies, payroll schemes are twice as common in small businesses as in large businesses. Payroll fraud can occur at your company in a variety of ways.

Employees may request pay advances without repaying them. Also, employees might even make up hours worked on timesheets. Even if they aren’t at work, employees could ask others to check in on their behalf.

Businesses have been apprehensive about moving specific workloads to the cloud. For example, most payroll processing has been done on-site. According to a recent report, only 25% of small businesses use cloud-based payroll systems.

Modern cloud-based payroll solutions like Utiliko offer several significant benefits that reduce these concerns. These platforms can initially be accessed remotely. This makes it possible for payroll departments to operate while working remotely.

Most cloud payroll solutions also accommodate full workflows. They have functions that automatically compute pay and deductions, produce pay stubs, and distribute payments. They can also be integrated with different business software programs.

This includes scheduling and time-tracking software, as well as bookkeeping platforms. This can assist payroll departments in avoiding incorrect computations and preventing time theft.

Worker’s Compensation

Another sort of small business fraud you can run into if you hire people is workers’ compensation fraud.

Workers’ compensation insurance protects employees who are injured on the job and lose their ability to earn a living. Typically, an employer will agree to pay an injured employee so that they are not financially harmed as a result of an incident that occurred while they were working.

Workers’ compensation fraud can manifest itself in a variety of ways, so you must remain vigilant. Employees may be injured outside of work and file a claim against your company. Employees may also make up for illness or injury.

Workers’ compensation fraud can be difficult to detect. Additionally, conducting investigations and making evaluations can take a lot of time and money for claims adjusters and risk managers.

However, with Utiliko’s solution, fraudulent workers’ compensation claims may be quickly identified and eliminated, sparing businesses from having to bear such a heavy financial burden.

The Utiliko fraud prediction model uses artificial intelligence and machine learning to warn of any potential fraud or abuse in workers’ compensation claims.

By incorporating Utilko technology into your claims management systems, you may make it simple for insurance professionals to spot false workers’ compensation claims.

Utiliko Cloud Systems Helps Fight Business Fraud

Business fraud is a major problem. Everyone in an organization must be vigilant, whether the company is the perpetrator or the victim of criminal activity. Utilko’s cloud-based business management platforms can keep your business safe from fraud. For more info, get in touch with us today.

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