A meticulous approach to cash management can also help businesses to guard against fraud by ensuring any anomalies are easy to spot.
For example, three-way forecasting, which links together data from the firm’s balance sheet, profit and loss accounts and cash flow – providing managers with excellent cash visibility across all areas of the business.
If actual figures are falling short of expectations in some areas, or performance starts to slide unexpectedly, managers should investigate the reasons why.
Greater focus on compliance and adherence to standards can help all businesses to guard against fraud.
The Client Assurance Standard from the Financial Reporting Council specifically applies to firms that are authorised to hold client money.
To ensure compliance, firms must carry out regular client account reconciliations, matching funds in their bank account to internal accounting records and to a record of monies owed to each client.
As these accounts are often targeted by fraudsters, detailed systems and procedures must be in place to protect them and a risk assessment must be carried out and reviewed regularly.
Firms handling client money can not afford to ignore the risk posed by invoice scammers and Risk Registers must be regularly updated to ensure they reflect the evolving threat of such fraudulent activity.
As well as ensuring staff are well trained and cash is well managed, firms must ensure they are fully compliant and have the right systems and procedures in place to protect client money and their own.
Mike Ayres is a senior manager in the advisory services team at accountancy firm, Menzies LLP