According to the Association of Certified Fraud Examiners (ACFE), the median loss in small business fraud cases is $154,000. Can your clients absorb a loss like that?

If they're like most U.S. small businesses, probably not.

According to figures from International Data Group, about 28% of all small businesses generate less than $100,000 in annual revenue. A full 54% generate less than half a million per year.

These are not businesses with money to burn.

But, yet, they are, by taking on risky employees and exposing themselves to potential fraud each and every day.

“Small businesses face a unique set of challenges when it comes to detecting and preventing fraud,” said James D. Ratley, CFE, president and CEO of ACFE, in a video the organization produced for Fraud Week in November. “Losing … money to employee theft is an expense many small businesses just can't absorb. You rely on the trust of your employees to make your company successful. But how much trust is too much?”

ACFE recently put together a checklist for preventing small business fraud. Here are the suggestions they offered.

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#1 – Conduct background checks on all employees.

#2 – Implement a written code of ethics.

#3 – Divide bookkeeping and check signing authority.

#4 – Deliver bank statements — unopened — to top management.

#5 – Implement a reporting mechanism or hotline.

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