Poor cash flow is the top reason why businesses fail, according to research by the U.S. Bank. Businesses grapple with insufficient funds because of several factors including improper financial planning, inadequate financial skills, and low sales. Lately, theft of finances and financial data has been marking the end of many small businesses.
How do you ensure that your company’s finances are secure? Which loopholes should you close? Here are 3 top ways to secure your money so that your business survives:
1. Protect Your Cash Reserves
In light of an employee survey by Statistic Brain, the employees you trust could be stealing from you. The survey findings revealed that 75% of workers stole company money at least once. 60% confessed to stealing from their company’s’ cash reserves no less than once.
Small businesses are losing money in billions of dollars to theft, and over 30% of these businesses do not survive the shock. Here’s how you can keep safe:
- Use smart safes
Smart safes have come to the rescue of many businesses.
A smart safe is a device that accepts, records, and stores cash. It is “smart” because it connects to the internet and other cash management technology, providing real-time cash records and monitoring transactions. Smart safes can also detect fake cash.
Access into a smart safe requires two credentials, so you can easily spot the fraudster in case cash goes missing. You can also hire a criminal lawyer to help you get back lost money.
- Secure cash movements to the bank and monitor transactions
Use an armored car to move your cash to your bank. Monitor bank activity as well to confirm that the employees deposit money as required.
- Monitor employees
Yes, you can monitor employee activities at work. You can install anything from CCTV cameras to computer software and check anything from emails, postal emails, and usage of computers.
2. Check the Security of Your Data
If you thought that employee theft is all that you have to worry about, think again. Leaking of financial or other sensitive company information can result in costly litigations for breach of data.
Protect client data, employee data, and even intellectual property. Here’s how to do this:
- Follow the basic rules
You’ve heard it time and time again—don’t store passwords on any device, always log out of all devices, update your password regularly, and use fewer apps and tools for your financial transactions. These are the foundations that help keep your data safe.
- Invest in a password management application
Password managers keep your data secure. They generate complex passwords for each of your sites and store them safely. To top up your security, enable multi-factor authentication as well.
- Comply with the Payment Card Industry Data Security Standard (PCI DSS)
If your company accepts, stores, or transmits cardholder data, you should be PCI DSS compliant. Some of the ways to comply include installing and maintaining a firewall configuration, making room for customers to change default passwords to stronger ones, and encrypting cardholder data, especially when moving it across public networks.
- Beware of phishing attempts
Criminals may try trick your employees or customers to give out sensitive information by sending them unsuspicious text messages, emails, or ads.
To prevent this, train your employees and customers to follow security practices such as not opening up suspicious emails and installing internet security software that offer protection should employees click on dubious links.
- Maintain at least two company credit cards and bank accounts
It helps to scatter your money in a few places just in case hackers still get through to your data. Having at least two company bank accounts and credit cards can help you do that.
3. Avoid litigations and insure your business
Between running your business’s day to day operations and trying to stay afloat, you may not see a lawsuit coming. If you run a small business and have reopened or are planning to reopen after the pandemic, you are looking at new CDC reopening guidelines that put you at the risk of litigation in case of non-compliance.
Other issues that can expose you to litigation include theft of intellectual property, workplace accidents, and failure to comply with the Employment Law. The Employment Law addresses issues such as termination, discrimination, and harassment at work.
Hiring a lawyer to help you breakdown the legal issues affecting your business can help you keep off such litigations.
You can also insure your business against unforeseen expenses such as workplace injuries, business crimes, and data breach.
The Livelihood of Your Business Is Its Financial Health
While many factors determine whether your business makes it through the 1st, 5th, or even 10th year mark, the state of your finances tops the list.
Be intentional about protecting your financial data, preventing litigations, and guarding your cash reserves. Do not forget to insure your business against possible financial losses. If your employees commit financial crimes, hire a criminal lawyer to help you recover lost money.