Fraud is one of those business risks that’s often underestimated—until it strikes. Whether it’s internal theft or external scams, the financial and reputational damage can be serious. Understanding how to protect your company isn’t just best practice—it’s nonnegotiable. If you’re wondering how to prevent fraud in businesses etrstech, check out etrstech, which breaks down effective and realistic strategies you can start using now.
The Cost of Complacency
Fraud isn’t just a headache—it’s expensive. According to the Association of Certified Fraud Examiners (ACFE), businesses lose an estimated 5% of revenue to fraud annually. That loss can mean tens of thousands—or millions—depending on your company’s size. Worse, many businesses don’t realize it’s happening until the damage is done.
Small and medium-sized enterprises (SMEs) are especially vulnerable. Unlike large corporations, they often lack dedicated compliance departments or complex security protocols. For many of these businesses, recovering from major fraud could mean months of financial downtime—or complete closure.
Your First Line of Defense: Internal Controls
To tackle how to prevent fraud in businesses etrstech, you have to start from within. Internal fraud—from employees, partners, or even leadership—is more common than most business owners expect.
Here’s what effective internal controls look like:
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Segregation of duties: No one employee should handle all aspects of a critical process. For instance, the person approving expenses shouldn’t be the same one issuing payments.
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Role-based access: Employees should only have access to the systems and data required to do their jobs. Limit visibility to sensitive financial systems unless absolutely necessary.
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Surprise audits and reviews: Periodic, unannounced audits can deter fraud simply because there’s an increased likelihood of being caught.
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Background checks: Hiring someone without checking their professional and financial background is risky. A criminal history check is a smart move—especially for roles handling money or client data.
Monitor for Red Flags
Fraudsters aren’t always criminal masterminds. Often, they display small behavioral cues or leave digital trails. Keep an eye out for:
- Employees who resist oversight
- High employee turnover in finance or purchasing departments
- Sudden lifestyle changes among staff (lavish purchases or vacations)
- Files or financial records that seem incomplete or hard to access
Early detection—based on behavioral and financial anomalies—can stop fraud before it snowballs.
Embrace Tech Tools to Your Advantage
When thinking about how to prevent fraud in businesses etrstech, technology should be a central part of your strategy. From automated alerts to AI-driven risk assessments, strong fraud prevention today is data-backed and responsive.
Here’s how tech can help:
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Automated accounting software: Programs like QuickBooks or Xero let you run real-time reports and identify inconsistencies without sifting manually through spreadsheets.
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Employee monitoring systems: These tools help track user behavior on internal networks, flagging potential misuse or unauthorized access.
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Two-factor authentication (2FA): It’s a low-effort, high-impact way to secure logins and prevent identity theft or data breaches.
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Fraud detection software: Tools like Fraud.net or Kount analyze transactions and flag suspicious activity before it processes.
Lean into smart tools that improve accuracy and reduce the human error that often leads to fraud.
Train Everyone—Not Just Security Teams
Fraud prevention isn’t only the job of compliance officers or IT departments. Every employee should know how to spot scams, understand why security policies exist, and follow correct reporting procedures.
Some ways to build a more fraud-aware culture:
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Conduct quarterly training workshops: Regular sessions keep staff updated about new threats (like phishing scams or deepfake calls) and reinforce secure practices.
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Create a whistleblower policy: Employees need a safe and confidential way to report suspected fraud without fear of retaliation.
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Use real scenarios: Simulations based on actual company workflows make internal training more relatable, and more effective.
When employees know what fraud looks like—and how to act—it creates a safety net your firewalls alone can’t provide.
Deal with Third Parties the Right Way
Vendors, contractors, and service partners can all introduce fraud risks if not properly vetted.
Here’s how to reduce exposure:
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Vet all suppliers: Do full due diligence before contracting. Verify credentials, check for previous legal issues, and ensure consistent financial records.
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Create clear contracts: Ambiguous payment terms or service details can invite fraud. Ensure contracts are reviewed legally before they’re finalized.
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Monitor ongoing performance: Just because a vendor clears initial checks doesn’t mean they’re always safe. Reassess every year at minimum.
Set firm boundaries with external collaborators, and always maintain a paper trail.
Build the Culture Before You Need It
Your attitude about fraud prevention sets the tone. Mitigating fraud should be a core part of how you lead and scale your business—not just something you tackle in an emergency.
Incorporate anti-fraud measures directly into:
- Onboarding processes
- IT policies
- Annual budgeting conversations
- Executive team reviews
Being proactive doesn’t require paranoia—just structure. And that structure works best when embedded from the top down.
The Bottom Line
If you’re seriously considering how to prevent fraud in businesses etrstech, you need a mix of people, process, and technology. Fraud prevention isn’t about being perfect—it’s about being prepared and staying vigilant.
Set clear internal controls. Use smart tech tools. Train your team. Vet your partners. Make it part of your culture.
Fraud may be inevitable in some industries, but damage isn’t. You have far more control than you think—if you start now.