The scale of fraud against UK SMEs has been laid bare by a new poll by Barclays and YouGov. More than 44% of small and medium-sized companies have been targeted by fraudsters, and the cost to both businesses and the wider economy is enormous. But what can be done to stop it?
Counting the cost
Of the 44% of SMEs unlucky enough to encounter a fraud attempt, more than half will suffer losses as a result. The total cost is estimated to have reached a staggering £40bn, which means an average loss of £35,000 for each victim.
That’s no small sum for the majority of small businesses, and it has clear consequences. 8.6% of cybercrime victims told Barclays that they were forced to make staff redundant in order to carry on trading – a figure that could be much higher if victims of other forms of fraud were included.
The Barclays study is part of a campaign to help entrepreneurs protect themselves against fraud, and particularly cybercrime. Their experts suggest that the key element is ensuring everyone in your business is aware of the dangers. That means:
Learning how to spot scam emails
Watching for spoof emails imitating internal or client accounts
Ensuring passwords are regularly updated
Using strong passwords with upper and lower case letters, as well as numbers and symbols
Reporting any incidents – to police and your staff – so it doesn’t happen again.
Preparing for the worst
Sometimes, however, even your best efforts aren’t enough. Consequently you need financial failsafes to keep your business running. This can be as simple as a comprehensive insurance policy, or a strong and stable cash flow. At Dukes we recommend ensuring that your invoicing process is clear and consistent so that you aren’t hit by a potentially damaging combination of fraud and cash flow problems.
Ideally you should invoice your client as soon as a job is finished, making sure to include information about interest charges and enforcement action in the event of non payment. You could also offer discounts to prompt payers. For those that don’t pay, put systems in place to send regular reminders until the balance is paid.
If you need further help or support reclaiming unpaid debt in a fast and sensitive way, contact us today.