Financial fraud is now the most common crime in England and Wales, accounting for around 41% of all crime according to the UK government’s Fraud Strategy from 2023. If you want to protect your business against financial fraud, you need to understand that small firms are often targeted because they lack the dedicated finance and security teams of larger companies. For women in business, particularly those leading smaller teams, the risk is not abstract.
The same strategy estimates fraud costs the UK economy £6.8 billion per year. The good news is that most business fraud is preventable with straightforward checks and habits. Here is how to strengthen your defences in 2026.
Understand the current UK fraud threat
Before you put defences in place, understand what you are defending against. UK Finance’s Annual Fraud Report 2024 found that £1.17 billion was lost to fraud across payment cards, remote banking and cheques in 2023. Authorised push payment (APP) fraud, where victims are tricked into transferring money to criminals, accounted for £459.7 million of those losses.
Cifas, the UK’s fraud prevention service, recorded more than 333,000 cases of fraud in its National Fraud Database in 2023. The most common threats facing small businesses include phishing emails, invoice fraud, CEO fraud, supplier impersonation, payroll fraud and card-not-present fraud.
Internal fraud matters too. Employees with unchecked access to accounts, payment systems and bookkeeping records can create fake suppliers, inflate expenses or divert funds over months before anyone notices.
Protect your business against financial fraud with weekly checks
If you do not review your bank statements, payment ledgers and cash flow regularly, you cannot spot fraud early. Set aside time each week to reconcile transactions and question anything unfamiliar, even small amounts. Criminals sometimes test accounts with minor payments before attempting larger thefts.
Cloud accounting software can help by automating bank feeds, flagging unusual transactions and producing real-time reports. If you are self-employed, our Making Tax Digital Sole Trader: 2026 Checklist for Women explains how digital record-keeping also strengthens financial oversight.
For limited companies, consider whether you need professional support. An accountant or bookkeeper can introduce separation of duties and independent checks. See Why Hire an Accountant for Your UK Business in 2026 for guidance.
Separate financial duties and limit access
No single person should control a financial process from start to finish. The person who raises invoices, approves payments and reconciles the bank should be different people where possible. If you are a sole trader, you can still build checks by reviewing all outgoing payments yourself before they leave your account.
Use role-based access in your accounting and banking software. Give staff only the permissions they need, and remove access immediately when someone leaves. Require two people to authorise payments above a set threshold, and never let the same person be both an authorised signatory and the person who creates payments.
Screen employees and suppliers
Most employees are honest, but weak processes create temptation. Run Disclosure and Barring Service (DBS) checks where appropriate, verify references from previous employers and check for gaps in employment history. For roles handling money, consider credit checks with the candidate’s consent.
Supplier fraud is a persistent risk for small businesses. Always verify new supplier bank details independently, using a known phone number rather than one from an email. If a supplier emails to say their bank details have changed, call them back on a number you already hold to confirm. This single habit prevents many invoice fraud cases.
Defend against phishing and cyber fraud
Phishing remains the main route into business accounts. The National Cyber Security Centre’s guidance for small businesses identifies phishing as one of the most common cyber threats. These emails often impersonate HMRC, banks, delivery firms or senior staff and ask for passwords, payment details or urgent transfers.
Protect your systems with these steps:
- Enable multi-factor authentication on all business email, banking and accounting accounts.
- Keep software, operating systems and antivirus tools updated.
- Train staff to spot suspicious emails and report them without clicking links or opening attachments.
- Back up critical business data regularly and store backups offline or in secure cloud storage.
- Use a business-grade password manager and avoid reusing passwords across accounts.
HMRC will never email or text asking for passwords, bank details or urgent payment. If you receive a suspicious message claiming to be from HMRC, forward it to [email protected] and report it to Action Fraud.
Verify identities and company information
The Economic Crime and Corporate Transparency Act 2023 has tightened rules around company information. Companies House now requires identity verification for directors and people with significant control. Verifying who you are dealing with is one of the simplest ways to avoid fraud.
Before paying a new company, check its details on Companies House. Look at filing history, registered address and director names. If something does not match what you have been told, pause the payment. Our guide Companies House Identity Verification: What Every Female Director Must Do Now covers the new rules in detail.
Use secure payment processes
For card payments, use 3D Secure authentication and check for unusual spending patterns. For bank transfers, always confirm new payee details by phone. Consider setting daily payment limits and requiring additional approval for high-value or international transfers.
If you use a business credit card, review statements weekly and set up instant transaction alerts. Look for cards with strong fraud protection, clear liability rules and easy dispute processes.
Report fraud and access support
If you suspect fraud, act quickly. Contact your bank immediately, report the incident to Action Fraud online or by calling 0300 123 2040, and notify your insurer if you have crime or cyber cover. The sooner you report, the better your chance of recovering funds and preventing further losses.
Free UK resources include:
- Action Fraud: the national reporting centre for fraud and cyber crime.
- Take Five to Stop Fraud: the government-backed campaign with simple fraud prevention advice.
- Cifas: offers protective registration and fraud prevention tools for individuals and businesses.
- National Cyber Security Centre: guidance on cyber security for small businesses.
Take action to strengthen your fraud defences
- Review your last three months of bank transactions for anything unfamiliar.
- Enable multi-factor authentication on email, banking and accounting software.
- Separate financial duties so no one person controls payments end to end.
- Verify all new supplier bank details by phone before paying.
- Report suspicious emails to [email protected] and Action Fraud.
Protecting your business against financial fraud is not a one-off task. It is a set of habits that become stronger as your business grows. Start with the highest-risk areas, your payment processes, access controls and supplier verification, and review them every quarter.
