If you’re a business owner or entrepreneur, you must know how your assets might be compromised. After all, your assets are what keep your business running. So from financial assets to inventory to data and more, protecting your assets should be a top priority. Here are four common ways your assets might be compromised—and what you can do to prevent it.
One of the most common ways business owners’ financial assets are compromised is through embezzlement. Workplace theft, such as embezzlement, costs businesses about $50 billion annually.
Embezzlement happens when someone in a position of trust within the company misappropriates funds for their gain. To prevent this from happening, ensure you have strong internal controls. Here are three ways you can do that.
One of the main ways your company might get embezzled is when an employee is granted access to financial assets and can use their knowledge of those assets for their gain. A straightforward way to prevent this is by ensuring all transactions involving money require two signatures. This will ensure that at least two people are looking over your finances at any given time, which reduces the chances of embezzlement.
Separation of Duties
Another common way your company can be embezzled is through one employee having all the power. This is often seen when an employee has access to credit cards, accounts payable and receivable, or cash on hand while also responsible for managing these assets. To prevent this from happening, ensure there’s a clear separation of duties and other internal controls, such as requiring a second person to approve any payments or write checks.
Finally, one of the best ways to prevent embezzlement is through regularly scheduled audits. Whether you hire an external party to do this for you or perform it internally yourself, ensure you’re auditing your assets at least once a year to discover if any money is missing.
Another common way businesses’ assets are compromised through inventory theft. This can happen either through external robbery (e.g., burglary) or internal theft (e.g., employees stealing inventory). To prevent this from happening, ensure adequate security measures, such as an alarm system, security cameras, and locks on doors and windows. You should also consider conducting regular inventory audits to ensure that nothing has gone missing.
In today’s digital age, a business’s most valuable asset is its data. This includes everything from customer information to proprietary company secrets. Unfortunately, if this data falls into the wrong hands, it could be disastrous for your business. On average, this can cost enterprises over four million dollars. Here are ways you can prevent it from happening.
One way to keep your data secure is by implementing firewalls. Think of these as physical barriers around the perimeter of your property. They act as a “wall” that only those you approve can pass through. You should also implement firewalls on all company networks and devices—such as laptops, phones, and computers—to ensure no one is entering or leaving your system.
Another way to protect your data is by backing up your data into the cloud. Cloud backup ensures no matter what happens—a natural disaster, a hacked network, or a stolen device—your data isn’t lost forever. You can look into some experienced managed cloud service providers for this. These providers can watch over your data, ensuring it’s always protected.
Another effective way to keep your data secure is through encryption. This involves scrambling the information, so authorized users can only read it and then unscrambling it as needed. All employees should have a password to access their accounts to ensure this. Additionally, you might require two-factor authentication, so employees need to enter an extra code after entering a password.
Lastly, you can check your networks for any potential breaches by hiring an ethical hacker. This is someone who will try to break into your system just like a real hacker would and then tell you what they did and how they did it. This can help identify any holes or vulnerabilities that need fixing so that anyone trying to steal your data has a more challenging time doing so.
Lastly, another important asset for any business is its reputation. This can be easily damaged if your company is involved in any scandal or negative publicity. To prevent this from happening, ensure you have strict policies and procedures regarding employee conduct and media relations. You should also regularly monitor social media and other online channels for any negative sentiment about your company so you can address it quickly and effectively if necessary.
As a business owner or entrepreneur, it’s essential to be aware of how your assets might be compromised—from financial assets to inventory to data. By taking steps to prevent asset loss or damage, you can help protect your business from potential disaster.