Fraud could make or break firms as margins squeezed during Covid-19
A lax attitude towards fraud could lead to many businesses becoming victims of the coronavirus crisis, according to a top lawyer.
Thousands of businesses across the country have been forced to close down, with many turning to Government benefits just to stay alive.
Now experts are worried about what businesses may never throw open their doors again.
Arun Chauhan, a lawyer specialising in fraud at law firm Tenet, said that how a company approaches fraud could have a massive impact on who is able to survive the crisis.
“Culture is ultimately determining which organisations may survive and which will collapse under Covid-19 pressures,” he said.
On average, firms lose as much as 5% of their revenue to fraudsters every year, a figure that could mean the difference between sinking or swimming.
But firms often fail to prioritise a problem that they cannot see.
“That 5% may be the ‘make or break’ difference to the bottom line in months to come as cashflow tightens,” Mr Chauhan said.
“Government measures will have their limits, especially for those organisations running on thin margins, such as retail.
“Fraud wears many veils. Its effects are hard to quantify. As a leader, you may catch an occasional glimpse of money ‘walking out of the door’, but it’s frequently difficult to pin down.”
But it is not just companies who have been forced to shut that will face problems. With many staff working from home, they have more freedom.
“Some companies are shining because their teams are working and breathing a clearly defined vision and mission, where high-trust cultures, with clear priorities, precedents, policies and procedures, exist and work.
“While others, used to working in ‘toxic’ work environments, may be under such pressure that working from home presents an opportunity for self-benefit at the cost of their employer.”