Most business owners feel that fraud will never happen to them, or the business is too small to experience fraud. However, a cruel reality is that the small business is more vulnerable to fraud than any other. Fraud is a devastating circumstance to any company for a variety of reasons. So much so, that an estimated 30% of all small business bankruptcies derive from embezzlement. Business fraud prevention in Miami is an important asset, and concern for any business. This is especially true, however when the business is small, or a startup company.
Why is the Small Business Particularly Vulnerable to Fraud?
The small business owner is especially susceptible to fraudulent behaviors as a result of inexperience, and lack of risk awareness. Most small business owners (at least successful ones) display hard-working, honest attributes that project to their employees. The small business owner is often not typically suspicious of others. This leads to a circumstance where a business owner fails to establish financial and other safeguards for their company.
Small businesses promote an environment with intimate and familial relationships between employees and operators. After all, this atmosphere is one of the most appealing features of the small business. This business practice is most times well founded. However, this isn’t always the case. There must be a balance. No trust and faith in your employees is a bad thing. On the contrary, trusting everyone fully and wholeheartedly is as well. The goal of any business owner is to create a balance between the two.
In order to increase your risk awareness, consider that there is an employee who will:
- Not be entirely honest or straightforward
- Feel or act entitled to higher payment than they receive
- Perceive you as a vulnerable, but wealthy individual
- Intend to borrow or misrepresent funds with intention but inability to pay back
Lack of experience also lends a hand to small business vulnerability. Even in the case of those businesses where the proprietor boasts more than adequate technical and service skill, these entities and individuals are still at-risk for business fraud. Many business owners experience the most happiness when they are producing or selling, and prefer to have another individual or entity handle the financial end of the business. This individual or entity could develop a perception that an owner is uncomfortable or disinterested in handling the numbers. When this occurs, they also could begin to consider how much they can get away without risking potential discovery.
Who Can Commit Fraud? Why?
Are you a business owner that feels you’ve experienced a case of fraud? Take a moment and consider every employee working for you. You likely cannot think of a single one that you can see committing fraud against your company. “It’s always the last person you suspect” may be a cliché saying, however, the statement contains truth. The culprit is rarely your newest employee who is a relative mystery to you. Most often, the guilty party is an individual with vast experience working with you.
When you start to think about it, everything begins to make sense. The ability to embezzle large amounts of money from a company requires a position of trust. Without this power, most individuals don’t have access to the company’s assets. Fraud by definition involves entrusted employees.
Opportunity for fraud is provided by the lack of internal control and accountability. There can be bad people that simply commit fraud. However, it is more often an individual who finds themselves in a situation that is spiraling beyond their control. Our beliefs often lead us to believe that no hired or entrusted employee is going to steal. Though the reality is that anyone is equipped with the propensity to act fraudulently when three factors exist:
If you feel that you experience some form of commercial fraud, immediate legal intervention is important. Consult with an attorney immediately about business fraud prevention in Miami. A qualified legal professional can lend their expertise to your situation early on, or even before a situation can occur.
Business Fraud Prevention in Miami
Fraud occurs commonly in the world of modern business. The impact that fraudulent actions can have on a business of any size is staggering. The situation increases exponentially for startup and smaller businesses that depend on their financial backing to survive. Courts throughout the South Florida area provide protections and legal recourse for business owners that experience fraud. This resource is in the form of a business fraud claim filed in court.
Our firm is experienced in the field of business fraud prevention in Miami and provides services for clients all over South Florida. The Law Offices of Paul A. Humbert, P.L. recover millions of dollars representing our clients both large and small. We can bring your case validity, and help you recover compensation for your suffering. We work with large corporations, banks, and financial institutions as well as smaller businesses and individuals.
Our attorneys are seasoned, with the experience and education to achieve a positive outcome in South Florida court. For more information on our business fraud prevention legal services, contact one of our legal representatives today. There is additional information available on our website concerning business fraud prevention in Miami, in addition to numerous other legal specializations. No business needs to experience an unfortunate circumstance like business fraud. There is no reason to go it alone, contact our law offices today!