How to Prevent Fraud and Theft in Your Business

Fix that and you have removed most of your exposure. Everything else is refinement.

The one rule

Nobody should be able to create a payment and approve it.

That means the person who sets up a new supplier is not the person who releases the payment. The person who records a customer receipt is not the person who banks it. The person who runs payroll is not the person who adds an employee.

In a business of six people this feels absurd. It is still the rule, and you can satisfy it with the owner as the second pair of eyes.

Why trust is not a control

Long-serving, trusted staff commit most internal frauds. Not because trust causes fraud, but because trust is what removes the checks.

The person nobody supervises is the person with the opportunity. Length of service increases trust and reduces scrutiny at the same time.

A control that only applies to people you doubt is not a control. It is a suspicion.

The five places money leaves

Check these and you have covered most of it.

1. Supplier payments. Fake suppliers, or real suppliers with altered bank details.
2. Payroll. Staff who left but stayed on the run.
3. Petty cash and expense claims. Small, repeated, rarely examined.
4. Customer receipts. Cash or transfers taken before they hit your ledger.
5. Inventory. Stock leaving without a sale behind it.

The controls that are worth the effort

Bank details changes. Any change to a supplier's bank account gets verified by phone, to a number you already held, not the number on the email requesting the change. This single control stops the most common fraud in the UAE right now.

Monthly bank reconciliation, done by someone who does not make payments.

Payroll headcount checked against your actual staff list quarterly.

The owner opens the bank statement. Not the finance team. The statement goes to someone outside the payment process.

Mandatory leave. Frauds that require ongoing concealment surface when the person is away for two consecutive weeks.

What to do if you suspect something

Do not confront the person first.

Secure the records before anyone knows you are looking. Access to accounting systems and email is where evidence disappears.

Then get someone independent to look. A forensic review of the specific area beats an accusation you cannot yet support, and an accusation you cannot support creates a labour problem on top of a loss.

What controls will not do

They will not stop a determined person who controls several parts of the process. They raise the effort and shorten the time before discovery.

They will not replace looking. The owner who reviews the supplier list once a quarter finds more than any control document.

Where we fit

We run focused control reviews on the areas above, and forensic work where something has already happened. Tell us who approves payments and we can tell you where you are exposed.