Making fraud a priority:
If you’re a small business owner juggling everything from setting strategy to building the sales pipeline to keeping the books, fraud risk might be the one thing that’s slipped down your list.
It’s easy to assume that being a small business makes you less of a target. But the opposite is often true. Smaller teams and less robust processes can make small businesses just as vulnerable to outside hacking and internal fraud as larger organizations, sometimes more so.
I sat down with Jerad Daley, an audit partner at Clark Raymond & Company to talk about fraud risk in small and medium sized businesses.
In this episode:
- External fraud vs internal fraud – which should you worry about the most.
- Strategies for setting a culture that naturally deters fraud.
- Tools and resources for small business owners to get support in evaluating fraud risk and leveraging technology to protect against it.
- How to manage conversations with your employees about fraud protection without damaging trust.
CFO Insight:
As cyberattacks become more common, it’s easy to feel like fraud prevention is out of your hands. But according to a 2024 ACFE report, more than 50% of all occupational frauds are linked directly to a lack of internal controls or management override of existing controls.
In a small team, that can be as simple as having a manager review and approve outgoing payments, limiting system access, and using bank features like positive pay.
Weighed against the potential risk – the median case loss was $145k in 2024 – those are lightweight steps. It makes practical sense to evaluate your company’s fraud risk now, before it becomes a cost you can’t undo.
What does that look like in practice?
If you’re ready to address your potential fraud risk, here are some actions that you can take today:
- Read our free small business guide to fraud prevention. In this guide we break down common fraud types and detail the top five controls you can implement immediately to address these risks. Also included in this guide is a fraud self-assessment to help you determine where your fraud risk may lie.
- Consider our Financial Health Diagnostic. It’s a low-cost way to get a full, CFO-led review of your financials, processes, and controls — including where fraud risk might be hiding — delivered as a clear, prioritized action plan within two weeks.
- Loop in your advisors: your fractional CFO, CPA or banker can help you turn a fraud risk assessment into a concrete action plan, and most are glad to have that conversation. If you’d like to talk it through with us specifically, sign up for a free consultation.
Follow The Series:
This is part of an ongoing series of conversations with experts who help business owners build stronger, more resilient companies.
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