Desperate times call for extra vigilance in order to protect your company’s resources.
It’s not just employees with entitlement mentalities helping themselves to extra pens and notepads you need to worry about. External fraud is on the rise, thanks to — you guessed it — the bum economy. Even if your company has never fallen victim to external fraud, you’ll want to fine tune your radar now, and encourage your Finance staffers to do the same.
One key place to stay sharp: Accounts Receivable. Many company cash flows are already getting crunched — the last thing you want to do is fill an order you’ll never get paid for!
Seeing one or more of these signs doesn’t necessarily mean someone’s trying to pull a fast one at your company’s expense. But it is probably worth some additional investigation.
Red Flag 1: A tough-to-trace e-mail address
Chances are your company requests e-mail addresses as a point of contact; perhaps you accept orders online.
In either case, if you see one of those free (and untraceable) e-mail addresses (gmail.com, yahoo.com, etc.), you may want to be wary. That customer can easily vanish and not be tracked down. Try pressing for an alternate e-mail before clearing orders.
Red Flag 2: A “too neat” address
123 Main Street is a dead giveaway, for sure. But there may be some other addresses that are less subtle, but very definite fakes.
At least until the economy picks up, think about making it standard operating procedure to have credit folks use Google Maps or another online tool to verify all prospective customers’ addresses.
It takes a second of your people’s time and can save you a mountain of money.
Red Flag 3: A need for speed
Rush orders may signal someone’s trying to make a fast getaway, without paying their bill. If salespeople are being pressured for an extremely tight turnaround or there’s a request for express shipping, ask for a reason.
Can’t get one? You may have a potential problem.
Red Flag 4: A problematic purchasing pattern
Chances are many of your customers have specific buying patterns. But when you have a new customer, watch out for this pattern that could signal trouble: several low value orders, followed quickly by a large, high-volume order.
That’s been ID’d as a telltale sign the transactions could be fraudulent.
It’s worth taking the time to call these four red flags to staffers’ attention. Just a little awareness can go a long way to protect your company’s cash.