All businesses should be aware of the potential dangers of fraud. When your business is doing well, there will be plenty of people looking to take advantage of you for their own personal gain. Fraud can come from the outside but you also have to watch out for internal fraud, so keep an eye out for any unusual behaviour from your employees. 

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If you are concerned about fraud, either internal or external, check out this article for advice on protecting yourself. However, it’s important to remember that this isn’t the full story and even if you protect yourself against fraud committed by others, your business could still be at risk. Many business owners don’t realise it but there are plenty of ways that you could accidentally commit fraud yourself, and that will lead to a lot of legal trouble. The good news is, you can avoid this if you know how it happens in the first place. So, these are the most common ways that a business can accidentally commit fraud. 

Tax Fraud 

This one is quite common amongst small businesses because it can get pretty confusing when you are filing your taxes for the first time. If you make mistakes, even completely innocent ones, you may be committing tax fraud. This often happens when people are calculating their expenses because they don’t know what counts as a business expense and what doesn’t. For example, if you work from home, you might think that your mortgage is a business expense, but it’s not that simple. A portion of your mortgage counts as a business expense and that portion is calculated based on the percentage of time you spend working in the home. You’re not working 100% of the time, so you can’t claim the entire mortgage as an expense. The same goes for gas and electricity bills. So, make sure you read the law thoroughly and, if you can afford it, hire an accountant to help you out. 

Insider Trading 

It’s way easier than you think to accidentally commit insider trading and the definition is flexible, so you have to be careful. If your business is doing well and you decide to sell some of your shares before your financials have been released to the public, that could be considered insider trading. If your family and friends buy stock based on conversations they’ve had with you about the business, that could be illegal too. Insider trading is a serious crime and you will need tenacious criminal defense attorneys to defend you, even if you never had any ulterior motives when buying and selling stocks. You have to be so careful when you are a business owner playing the stock market and if you are unsure whether something is legal or not, you should seek help from a financial advisor or stockbroker.

Bribery 

Rewarding your employees is important but if you do it in the wrong way, it could be misconstrued as bribery. If you give somebody a big bonus before asking them to do you a favour, for example, that could be considered immoral. It’s not always necessarily illegal, but it could definitely land you in hot water. That’s why you need a clear employee rewards program in place so you have a framework for these kinds of things. 

Even if it’s an accident, committing fraud can land your business in a lot of trouble, so make sure that you avoid these common mistakes.