Think only large corporations are victimized by fraudulent employee actions? A new study on fraud has found that small businesses are actually more likely to experience fraudulent activity by their employees, but there are simple steps you can take to protect yourself.

Many small businesses gain success through the hard work and dedication of a few individuals who want to take a dream and turn it into a profitable business model. Starting a business takes long nights, stressful financial times, and the willingness to work with all parties of your core team. However, after turning your dream into an operational business, you and your team must make crucial hiring choices to push the business forward. Initial hiring choices typically fall under harsh scrutiny, because you only have the performance of your core team to which to compare potential new employees’ credentials and overall impression. Feeling comfortable enough to bring in new people to the close-knit relationship of your small business is an important and necessary step towards business growth. A certain degree of trust must be built between existing staff and new hires, and this trust can become difficult to maintain when someone abuses it.

A recent fraud study conducted by the Association of Certified Fraud Examiners found that businesses with fewer than 100 employees suffered the same median level of theft – $150,000 – as much larger companies. Additionally, this study found that those same small businesses were found to be much more likely to fall victim to theft, and revealed that the smallest companies accounted for 30 percent of the fraud cases studied; this percentage is compared to just 20 percent for organizations with more than 10,000 employees. Some of the most common crimes that account for this high level of theft in small businesses are check tampering, skimming, payroll, and cash larceny schemes. Employees who possess enough internal knowledge of how a small business operates are in a position to exploit certain weaknesses within a company’s financial practices.

These numbers are scary and should make all small business owners concerned about how your employees are treating your business. Luckily, many of these losses can be prevented with basic control procedures. Entrepreneur recently highlighted a number of these practices for small businesses to protect themselves from employee theft and fraud:

• Divide responsibilities and broaden oversight. The most sensitive area of your small business that should not be run by one person is recordkeeping. By having more than one employee handle financial transactions, the likelihood of fraudulent activity going unnoticed decreases and further protects your business.
• Expect and enforce ethical behavior. Small businesses oftentimes have casual work environments and friendly discourse between employees and superiors. And that’s great! Keeping the workplace positive does great things for productivity; however, business owners must also make it clear that they are vigilant and have a zero-tolerance approach to unethical behavior.
• Hire with care. Background checks have become commonplace for nearly every work environment, but a credit check may also provide a wealth of information when hiring someone charged with making financial decisions. Be wary of the types of background checks you are running on your employees, though, and check with your attorney about state and federal laws regarding different forms of background check consent.
• Pay attention to changes in work behavior and hours. Once an employee has engaged in fraud, they must stay vigilant to protect themselves from being caught. You may see these employees come in early, stay late, and avoid taking vacations to prevent exposure.
• Build the right team. While every small business has this as a general goal, it can do great things to prevent fraudulent activity within your business. The ability to hire the best employees comes from the capacity to grow your business consistently, and using a capital advance can help you upgrade certain aspects of your small business that could attract the best talent for your team.

Small businesses sometimes have a less structured and strict environment than large corporations – a practice that can do great things for day to day operations – but there are some who see this somewhat more relaxed environment as an opportunity for crime. By implementing these simple practices, you can help protect your small business from falling victim to employee theft and fraud.