Home > Legal Articles > White Collar Crime: A big issue for small companies

White Collar Crime: A big issue for small companies

Posted on Saturday, 30th November 2013 by

Photo Credit: Mike Chen aka Full Time Taekwondo Dad via Compfight cc

It’s not just large companies that have to deal with theft and fraud. Small businesses are just as likely to be victims of white collar crime, as employees think they’re more likely to get away with it. But, hopefully, identifying culprits and putting in place prevention policies are easier processes with a smaller workforce.

According to the Home Office, cases of fraud alone cost the UK economy circa £73 billion per year. More alarmingly, researchers at the University of Portsmouth estimate that only 1.5 per cent of frauds are ever reported and only 0.4% receive any sort of criminal sanction.

It’s not just accounting or banking fraud that small businesses have to deal with though. White collar crimes can also include offences such as forgery and, more commonly, computer and internet crimes.

It’s also important to remember that it’s not just big players, working in City, stealing millions. The crime could be as simple and unsophisticated as an employee claiming excess mileage on their monthly expenses form. However, if a small business doesn’t have the systems in place to carry out the appropriate checks, these relatively small amounts could lead to thousands of pounds disappearing over the course of a financial year.

A lot of prevention polices are common sense but it is surprising how often they are ignored. Some simple tips for preventing white collar crimes are:

  • Designate specific individuals to handle / verify financial transactions – It’s a good idea to make these two different people, in two different departments, but always be aware that they could be colluding together.
  • Inspect financial records regularly – Ensure that managers are aware of the business’ projected profits and cash flows, and have a good financial oversight.
  • Thoroughly investigate the past behaviour of your business partners – Any sort of previous criminal charge should be a red flag, even if it was dismissed.
  • Have an accountancy firm audit your books – This can be done annually or quarterly and can be an expensive outlay for a small business but it will make the whole system more transparent and impartial.
  • Have a legal team at the ready just in case……!

Daniel Martin is one of our Solicitors in Leicester, who are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Leicester please contact us.

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