Have you checked for fraud and error?

North Wales based accountancy firm Pritchett & Co Limited is warning businesses to check their accounts regularly to identify errors and fraudulent acts that could potentially harm their business.

It comes after a new report produced by the Centre for Counter Fraud Studies at the University of Portsmouth uncovered an increase in the amount of fraud and error found within UK businesses and the public sector during the last year.

Their research revealed that these mistakes cost organisations more than £98.6 billion a year in turnover. It also discovered that losses from these activities as a percentage of annual expenditure increased by 18 per cent from 2010/11 to 2012/13.

The report's figures are based upon valid loss measurement exercises, which estimate fraud in an organisation by checking one type of its expenditure for fraud and extrapolating it across the other areas of the business.

Andrew Morris from Pritchett & Co Limited, said: “Fraudulent actions and errors can easily be missed within a busy business, but failing to spot them and rectify the problem could soon eat into profits and turnover.”

“This report highlights what a significant issue this is in the UK and with many small and medium-sized enterprises already facing issues with late payments; this is the last thing they need”.

“However, by ensuring you have a robust set of accounts and a monitoring system in place you can identify problems and deal with them quickly.”

Andrew Morris added that many firms needed to create a culture that made reporting fraud and errors in the workplace second nature. He also recommended introducing tougher internal guidelines to reduce complacency and prevent mistakes from happening in the future.

For further details please contact us at info@pritchettandco.co.uk or call us on 01492 534250.

The author is a director at Pritchett & Co Limited, Chartered Accountants and Chartered Tax Advisers, members of UK200Group with offices throughout the UK and Associates overseas.