SOURCE: Sage Software

June 25, 2008 10:00 ET

New Research Shows Small Businesses Most Vulnerable to Employee Fraud

Following Simple Steps and Implementing Appropriate Software Lessens Risk to Entrepreneurs' Bottom Lines

ATLANTA, GA--(Marketwire - June 25, 2008) - Sage Software announced today the findings of a recent independent survey conducted by M/A/R/C Research which revealed that approximately one third of small businesses in the United States do not have, or are unaware if they have, software, systems or tools in place to inhibit or prevent employee fraud. Further results show that about one-in-four companies that have been prior victims to fraud continue to operate without protection or systems after the fact. These research findings confirm that small businesses are highly exposed to fraud in the workplace, and need to apply controls to reduce that risk.

"If this survey proves anything, it's that small business owners need to take their vulnerability to employee fraud seriously, and implement solutions that limit their exposure to this type of malicious activity," said Daneen Heislitz, director of strategic marketing, Sage Software. "Deployment of appropriate software, performing background checks on all job applicants and setting up fraud avoidance plans are just a few critical steps employers should take to protect their companies."

Findings from the study also show:

--  21 percent of the small businesses interviewed stated that they did
    not have any system in place to prevent employee fraud.  13 percent were
    unsure if they did or did not.
--  28 percent of small businesses reported that they had been victimized
    by employee fraud in the past.
--  Companies with 75-100 employees (42 percent) and those with $1,000,000
    to $5,000,000 in annual revenues (34 percent) are most likely to experience
    employee fraud.
    

The industries most likely to have experienced employee fraud are retail stores/outlets (16 percent), health care firms (9 percent) and finance firms (7 percent).

"Small businesses are challenged in combating fraud as they often have too few employees to divide tasks; however, proper planning of internal controls can significantly offset this inherent limitation," according to Julie Gilliom, a forensic analyst with Forensic/Strategic Solutions, PC in Birmingham, Ala.

One of the most readily accessible tools companies can use to prevent fraud is within their accounting software, which often includes features that document and analyze processes for workflow efficiency, and can assist employers in spotting potential internal control weaknesses. Accounting software -- such as Peachtree by Sage -- that allows for very specific user access levels also can be extremely helpful in deterring fraud. By managing employee access at the module level, small companies can further monitor who's able to access what, and when, in critical financial data.

"Small businesses today are already under extreme pressures from external influences, -- particularly in the current economy. While there is no 100% solution to preventing fraud, we are continuously upgrading our programs' internal controls to add another layer of risk avoidance, through features like customized security access and the Internal Accounting Review(1), available in our line of Peachtree Accounting software," said Heislitz of Sage Software.

Of the respondents that stated they had prevention processes and systems in place, 47 percent are using their accounting software as one of their tools. Respondents in this survey were randomly selected throughout the United States and more than 500 interviews were conducted in the first quarter of 2008.

For a list of tips on how to mitigate the risk of fraud please visit http://www.peachtree.com/minisite/peachtreecares/pdf/fraud_prevention_tips.pdf

About Peachtree Software

A long time favorite of accountants and growing businesses, Peachtree is designed for small companies that take their accounting seriously and view it as a tool to make better decisions. Peachtree is a comprehensive solution based on double-entry accounting principles, featuring screen-level security, audit trails and automatic accounting checks, so small businesses get the accuracy and control they need to improve their results.

About M/A/R/C® Research

M/A/R/C Research is a full-service marketing research and consulting firm that uses innovative qualitative and quantitative methodologies to help clients launch better products and services, find new and valuable customers, and build stronger brands. Our proven marketing issues platforms support clients' brand building efforts.

About Forensic/Strategic Solutions PC

Forensic/Strategic Solutions, PC, specializes in fraud examination, forensic investigations, litigation support, business valuations and consulting services. Our personnel are trained to analyze, interpret, summarize and present complex business issues in a manner that is both understandable and properly supported. Our client base is national, consisting of law firms, other businesses, government agencies, and individuals. More information is available at www.forensicstrategic.com.

About Sage Software

Sage Software supports the needs, challenges and dreams of nearly 2.9 million small and medium-sized business customers in North America through easy-to-use, scalable and customizable software and services. Our products support accounting, operations, customer relationship management, human resources, time tracking, merchant services and the specialized needs of the construction, distribution, healthcare, manufacturing, nonprofit and real estate industries. Sage Software is a subsidiary of The Sage Group plc, a leading global supplier of business management software and services to small and medium-sized businesses. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage Group now has 5.7 million customers and employs over 14,800 people worldwide. For more information, please visit the web site at www.sagesoftware.com or call (866) 308-2378.

(1)Sage Software is not liable or responsible for any fines or penalties that may result from errors in your company accounting records. The Internal Accounting Review is not intended to uncover all questionable transactions.

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