Eight red flags that may point to fraud in your business

Most fraud in small and mid-sized businesses is discovered late — often by chance. Knowing the warning signs helps you act earlier.

1. 1Unexplained cash shortages or frequent small differences in cash counts.
2. 2New suppliers added without approval, or with addresses and bank accounts that match an employee's.
3. 3Invoices just below approval limits, again and again.
4. 4Rising refunds, discounts or write-offs without a business reason.
5. 5Missing documents or photocopies where originals should exist.
6. 6Bank reconciliations that are always late or never completed.
7. 7An employee who refuses leave or insists on handling certain tasks alone.
8. 8A lifestyle that doesn't match a salary, combined with any of the above.

What to do

• Don't accuse anyone before reviewing the facts quietly.
• Secure documents and system access.
• Get an independent review of the area concerned.

Strong internal controls and a monthly owner review prevent most cases before they start.