Fraudulent situations crop up in businesses all the time and it is important that employers deal with these situations straight away. However, many do not set out what they class as fraud or what the process is for dealing with this. Here, Peninsula’s Financial Director, Peter Swift, looks at the issue of fraud. If you believe there has been a possible case of fraud in your business, call through to the Advice Service on 0844 892 2772 and one of our advisors will be happy to help.

“Workplace fraud – it could never happen here. WeÂ’re like a family here – we all get on well and they love working here. TheyÂ’d never commit fraud here.” WeÂ’ve all heard this many times, probably said it ourselves. But it is almost certainly not true.

But what is fraud? One manÂ’s meat is another manÂ’s poison. What is fraud in one company may well be normal practice in another! You need to think about what allowances you make and whether you are happy to leave these in place. For example, do you allow employees to make personal calls on the company phone? Use their personal mobiles during working hours? Surf the internet or chat on social networking sites? Who misses the odd highlighter pen or minds if they do some photocopying after hours? These are all reasonable things to do if done in moderation, but still fraud if against the companyÂ’s terms and conditions.

The basic rule is to stay consistent. Make sure that the rules of engagement are clearly set out in the Employee Handbook and understood by your employees from the outset. You need to also ensure employees understand the consequences of breaking these terms and if you choose to take a tough stance, be vigilant and ensure you monitor every employee. There is no point continually moving the goalposts or having them in different places for different groups of employees.

Make sure you set an example – and are seen to set it. If you don’t allow employees to claim for the mini-bar when travelling, make sure the directors are not found to be raiding the fridge when they are away on your annual beano. The rooms may be more expensive but the principle remains the same.

Transparency generates trust, especially in a smaller company where everyone knows everyone else’s business. If your staff see that the director completes an expense claim each month, it is much easier to tell your employees that they must do it properly and provide supporting receipts whenever possible. But sometimes it isn’t possible to get a receipt – which is where trust comes in. I have no problem with people claiming for a taxi ride where they lost the receipt – I’d rather they did that honestly than just use the pad of blank receipts another taxi driver gave them last month – which I would consider fraudulent! In these types of situations, it is an unfortunate fact that the actions of a few will affect the majority of those claiming only what is right. If you suspect these types of actions are taking place, you need to implement a more rigid control system and try to ensure supporting evidence is given for all expenses.

The metrics you measure give you the behaviour you deserve. This refers to the age old dilemma that people will always try to find a way around whatever rules you put in place. So think about them carefully and think about what actions you would class as fraudulent and explain them clearly in the handbook.

Remember, if you are worried that fraud, no matter what type, is affecting your business, call through to the Advice Service on 0844 892 2772 and one of our consultants will be able to assist you.