--- title: 5 Most Common Fraud Scenarios for Small Businesses description: For a small business, employees wear many hats, and they may lack the expertise to perform some of the tasks assigned to them which is why internal fraud is huge in small businesses. image: https://rmcu.net/hubfs/iStock-823318306.jpg --- [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net) [Online Banking Login](https://banking.rmcu.net/auth/signin) [Online Banking Login](https://banking.rmcu.net/auth/signin) [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net) - - [Home Loans](https://rmcu.net/home-loans) - [Personal](https://rmcu.net/personal) - [Business](https://rmcu.net/business) - [Membership](https://rmcu.net/membership) - [Careers](https://rmcu.net/membership/about-rmcu/careers) - [Contact Us](https://rmcu.net/contact-us) - Search - [Financial Education ▾](https://rmcu.net/blog/5-most-common-fraud-scenarios-for-small-business#financial-education-nav) - [About RMCU ▾](https://rmcu.net/blog/5-most-common-fraud-scenarios-for-small-business#about-rmcu-nav) - [Security](https://rmcu.net/membership/security) - [TruStage: Security Alert](https://rmcu.net/trustage-security-alert) - [Money Mastermind](https://rmcu.net/money-mastermind-lessons) - [Financial Counseling](https://rmcu.net/financial-counseling) - [Savvy Money](https://rmcu.net/membership/financial-education/savvy-money) - [Blog](https://rmcu.net/blog) - [Resources](https://rmcu.net/resources) - [RMCU Team](https://rmcu.net/membership/about-rmcu/rmcu-team) - [Member Information](https://rmcu.net/membership/about-rmcu/member-information) - [Annual Meeting](https://rmcu.net/membership/about-rmcu/annual-meeting) - [Community](https://rmcu.net/membership/about-rmcu/community) - [Our History](https://rmcu.net/membership/about-rmcu/history) [back to blog](https://rmcu.net/blog) [Business/Commercial Banking](https://rmcu.net/blog/topic/business-commercial-banking) # 5 Most Common Fraud Scenarios for Small Businesses Read Time **1 mins** | Written by: Rocky Mountain Credit Union [mailto:?subject=5%20Most%20Common%20Fraud%20Scenarios%20for%20Small%20Businesses&body=https%3A%2F%2Frmcu.net%2Fblog%2F5-most-common-fraud-scenarios-for-small-business](mailto:?subject=5%20Most%20Common%20Fraud%20Scenarios%20for%20Small%20Businesses&body=https%3A%2F%2Frmcu.net%2Fblog%2F5-most-common-fraud-scenarios-for-small-business)   ## Payroll Fraud Payroll fraud occurs in 27 percent of all businesses and twice as frequently in small businesses(fewer than 100 employees) than in larger ones. Owners must gain a working knowledge of the payroll system and enforce accountability among bookkeepers. Payroll complexities increase as a company grows, especially if overtime is a factor, owners have to maintain consistent scrutiny. ## Cash Theft - Skimming: when an employee takes cash that hasn’t been reported to the accounting system - Larceny: when an employee takes cash that has been reported - Fraudulent disbursement: when an employee releases funds that haven’t been authorized by the owner ## Online Banking - Online banking has increased in popularity as funds could be easily transferred to erroneous accounts - Cybercrime has never been more sophisticated - Small business owners need to stay up to date on threats and respond accordingly ## False Invoicing - Basic oversight over every vendor in their business - False invoicing is an increasingly popular fraud method - Employee creates false suppliers or pays a legitimate supplier and diverts the cash into an alternative account ## Invoice Email - Perpetrators who pose as legitimate suppliers and advise changes to existing payment arrangements - Fraud may not be detected for some time - Business is alerted by complaints from suppliers that payments were not received - Regular check-in with vendors can help guard against this fraud Small businesses that have reported fraud suffer an average loss of $150,000. That can make or break a small business. ##### Rocky Mountain Credit Union Share the Love [mailto:?subject=5%20Most%20Common%20Fraud%20Scenarios%20for%20Small%20Businesses&body=https%3A%2F%2Frmcu.net%2Fblog%2F5-most-common-fraud-scenarios-for-small-business](mailto:?subject=5%20Most%20Common%20Fraud%20Scenarios%20for%20Small%20Businesses&body=https%3A%2F%2Frmcu.net%2Fblog%2F5-most-common-fraud-scenarios-for-small-business) You May Like These ## Related Articles ![](https://rmcu.net/hs-fs/hubfs/Blogs/Grow%20Your%20Business%20and%20Get%20That%20Small%20Business%20Loan.jpg?width=700&name=Grow%20Your%20Business%20and%20Get%20That%20Small%20Business%20Loan.jpg) Tips from the Pros ### [Grow Your Business and Get That Small Business Loan](https://rmcu.net/blog/grow-your-business-and-get-that-small-business-loan) Are you looking to get a small business loan for your business? You don't have to struggle through i... 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