According to research by The Annual Fraud Indicator (AFI) 2017, fraudulent activity costs the UK £190 billion annually, which is equal to £7,200 per household and more than the GDP of 148 countries.
Private sector fraud losses are estimated to be £140 billion, with a “significant proportion” of costs coming from procurement fraud.
Additionally, public sector fraud losses are estimated to be £40.4 billion, while charities lost £2.3 billion to fraud and individuals lost £6.8 billion.
Online banking fraud increased by 226 per cent and telephone banking fraud by 178 per cent over the past year, as technology opens up “new avenues” for fraudsters.
“The 2017 Annual Fraud Indicator highlights again the colossal cost of fraud to the UK economy,” Professor Mark Button, Director of the University of Portsmouth’s Centre for Counter Fraud Studies, says.
“At £190 billion it would represent more than the UK government spends on health and defence combined, or on all welfare payments, bar pensions.”
Effective management accounts and company audits
When putting processes in place for effective business administration, sound management accounts will enable better control of your financial situation and awareness of the business in real time. This can be effective not only in detecting and countering fraud, but also in enhancing planning for the peaks and troughs. In turn, whilst many companies do not need an audit due to rising thresholds, an audit can give comfort to business owners and act as a fraud deterrent.
At Beavis Morgan, we work with SMEs to put processes in place which make it easier to run your business, reduce risk and maintain effective management of your company’s working capital.