Every giant business shares a few attributes in common, and one of them is proactiveness. The ones you’ll see increasing are more vigilant and focused on correcting their shortcomings than their competitors. Indeed, it is one of their secrets to success.
Speaking of success, another ladder you need to climb another ladder to get there: making effective long-term decisions. You have to make choices that align with the current trends and prove fruitful for your future, and the adoption of technology is one of the major ones.
Technology is a tool that ensures keeping your business on the right track. It helps identify opportunities alongside highlighting a fraud risk. These aspects of a business go hand in hand, but the latter can get overshadowed sometimes. Therefore, staying updated with all kinds of fraud in your business is highly important.
Types of Frauds Businesses Should Look Out For
When a business encounters fraud, it comes in all kinds, including kickbacks, payroll deception, bribery, and more. Your accounting systems fall prey to scams, and intentional misrepresentation is where your business can go on the back foot.
Tampering with the financial data, share prices, and other valuation methods to make your company look more profitable costs massively in the future. Manipulating income, expenses, assets, or liabilities is never appreciable. Here are some of the most significant frauds you should know about.
- Claiming money as obtained before the products or services are supplied and recording the anticipated sales prematurely
- Creating a deceitful picture of your business’s fiscal position by inflating your share price in the market.
- Showing false revenue by showing sales that never occurred in ways that include sales double-counting, developing phantom customers, and altering the current customers; legitimate invoices
- Reversing inaccurate sales at the reporting period’s end to cover the deceit to achieve unattainable sales objectives.
- Overstating assets by estimating the inappropriate valuation reserve or depreciation schedule
- Boosting the retained earnings and net income falsely, so the financial statements show inflated shareholders’ equity
- Keeping your liabilities and obligations off the financial statements to raise assets, equity, or net earnings
- Excluding warranties and loans while underreporting health benefits, salaries, and vacation time
- Obscuring related-party transactions, significant events, contingent liabilities, or accounting changes from the financial statements.
- Understating business expenses, exaggerating the income, and devising an incorrect amount of the company’s net income
- Modifying the financial statements to hide embezzlement or theft or embezzlement by including fake expenses
- Enriching the business stats to enhance the company’s valuation to portray a flourishing image before the investors and business community
How To Prevent Frauds Using NetSuite ERP?
NetSuite ERP has the ability to recognize all signs of fraud earlier in your operations and take corrective measures immediately. Here are all the ways to avert fraud in your business using NetSuite ERP.
Streamline Financial Processes Effectively
Implementing a system that enforces strict internal controls is the ideal method to protect your business against fraud. It should set apart duties and conduct periodic audits of your financial statements. Luckily, NetSuite’s ERP automates all your most vital processes to prevent by creating a strategy and protecting your financial integrity.
Proactively manage risk on an ongoing basis, increase efficiency, and improve your ability to track data changes for complete organizational visibility. NetSuite providers and industry experts help you assess the best ways to use NetSuite ERP and execute the solution with the most suitable customizations.
Moreover, it helps you achieve your fraud and risk prevention goals faster. It guides the users through every stage and detail to serve continuous support that leads to business success.
Execute Intelligent Accounting Controls
Automation with NetSuite’s ERP is your best help with fraud risk assessment. It recognizes the bone of contention and helps you eradicate every risk in its initial stages only. It does so by enforcing the segregation of tasks and ensuring solid mechanisms for approval mechanisms.
It includes calling for the CFO to give a heads-up on high-stakes dealings to eliminate any occurrence of unauthorized activities. Furthermore, it assists in arranging automatic alerts when addresses, names, or banking details are altered on the client’s accounts and in case of irregularities in file integrity.
Clear Audit Trails
Audits are all about pointing out areas of doubt and acting upon any discrepancies. It is a process that maintains transparency in your data across every function of your business.
NetSuite provides an always-on audit trail, access logs, built-in analytics, and workflow management. It equips your business with the functionality to assess in-depth summary reports and monitor all the transaction details with the utmost accuracy.
Not to mention, it eases the auditor’s job by quickly investigating malicious activity that could negatively affect security, functionalities, or financial statements.
Use ERP to Monitor Data
Keeping strict checks on data consistency, authenticity, and reliability is extremely important. You can track them manually, but automated fraud risk management is the need of the hour. Nearly every business in the industry has digitized its setup because of the advantages you get from it.
NetSuite implements overlapping actions to manage access to its systems and networks tightly. It blocks all unauthorized data center access attempts, and prohibited connection trials are always investigated. In addition, the software for enterprise-grade antivirus destroys malware.
The Final Word about Using ERP to Avoid Frauds
Being reactive is not an option in the fast-paced corporate world is not appreciable today. To take your business forward, you need to be more robust and wise with your choice of tools.
Having said so, NetSuite ERP is the best mechanism you could incorporate to keep any kind of fraud away. It is how startups are becoming giants, which are growing even more significantly every day. Henceforth, it’s time you welcome such software into your organization and experience its grandeur by yourself.