Small and medium-sized businesses (SMBs) are prime targets for financial fraud, and the consequences can be devastating. Imagine one of your trusted employees embezzling company funds or an invoice being manipulated to siphon money out of your business. The worst part? You might never know until it’s too late.

Why are SMBs the prime targets for financial fraud, you may ask?

Limited Oversight and Resources
Unlike larger companies, SMBs often have fewer employees overseeing finances, leading to overlapping roles. This lack of separation can make it easier for fraudulent activities to go undetected.

Trusting Relationships
SMBs typically rely on a small group of trusted employees to manage their finances. Unfortunately, these close relationships can be exploited by dishonest individuals who manipulate systems for personal gain.

Lack of Formal Financial Controls
Many SMBs don’t have comprehensive internal control systems in place. This makes it easier for fraudulent transactions to occur without being noticed.

Here’s how the fraudulent activities come to play

Payroll Fraud
Payroll fraud involves manipulating employee compensation, such as inflating hours worked, creating ghost employees, or submitting fake overtime claims. This can be particularly damaging because payroll is often one of the largest expenses for a business.

Invoice Manipulation
Fraudsters can alter or create fake invoices to redirect funds into their own pockets. This might involve inflating the amount of an invoice or creating entirely fake invoices for goods or services that were never provided.

Unauthorized Transactions
Employees with access to company accounts may make unauthorized transactions, like transferring money to personal accounts or making payments to fictitious vendors. Without proper checks, these transactions can go unnoticed for months

Forensic accounting provides the expertise and tools needed to uncover fraud before it spirals out of control. Here’s how it can help SMBs:

Fraud Detection: Forensic accountants use advanced techniques to spot irregularities in financial records and identify suspicious transactions.

Risk Mitigation: By identifying vulnerabilities in your financial systems, forensic accountants help you strengthen internal controls to prevent future fraud.

Legal Support: If fraud is discovered, forensic accountants provide the evidence needed to support legal action and recover stolen funds.

Financial fraud doesn’t discriminate—it affects businesses of all sizes, but SMBs are especially vulnerable. Don’t wait until it’s too late. Protect your business with forensic accounting services that can detect fraud early, prevent financial loss, and safeguard your future.

Number Count specializes in forensic accounting tailored to the unique needs of SMBs. Let us help you build stronger financial controls and protect your business from fraud. Contact us today for a consultation and ensure your business stays safe.