As a chartered accountant who has worked remotely with companies across Europe for more than 25 years, I’ve seen the same basic patterns show up time and again when businesses face fraud. Owners often discover problems too late because early warning signs were missed or because they didn’t know how to respond without making the situation worse. This article condenses practical, experience-based guidance you can use immediately: what to look for in your records and a pragmatic three-step framework for investigating concerns without turning your company upside down.
My approach is built on simple principles I use with clients: be methodical, preserve evidence, and act proportionately. Below I outline common red flags that should prompt closer review and then walk you through a three-step process — Investigate, Report, Advise — that keeps legal, HR and operational risks in view while helping you restore control.
Recognising Common Red Flags in Financial Records
One of the most reliable indicators of trouble is inconsistency between source documents and ledger entries. Examples I routinely encounter include bank reconciliations that never balance, missing invoices for large payments, or frequent manual journal entries dated on weekends or outside normal business hours. Don’t dismiss these as bookkeeping laziness — they’re the places to start looking more closely.
Look for patterns rather than single anomalies. Duplicate payments to the same vendor, repeated small refunds or write-offs that cumulatively become material, and a concentration of approvals or authorisations routed through one person are classic signs. In smaller teams, I’ve seen trusted employees both authorise and reconcile transactions; that lack of segregation of duties is fertile ground for misuse.
Operational red flags matter too: vendor master records with similar addresses to employees, new vendors added late on Friday afternoons, or sudden changes in bank account details submitted by email are worth investigating. Also pay attention to behaviour — employees who resist sharing files, who suddenly live beyond known means, or who control access to critical systems can be telling. Combine document review with interviews and system logs to build a clearer picture.
My Three-Step Investigation Framework for Owners
Step 1 — Investigate: start with a calm, focused triage. Secure financial records and system logs (export bank statements, accounting backups, and access logs) and preserve them in read-only form; change passwords and limit access to a small trusted team. Avoid confronting suspects until you have evidence, and document every action you take to maintain chain of custody; this matters if you later involve legal counsel or law enforcement.
Step 2 — Report: once you’ve identified patterns and quantified the exposure, produce a concise factual report that separates verified facts from suspicions. Include timelines, affected accounts, documentary evidence and an initial estimate of loss. Share this report with the appropriate stakeholders in a controlled way — typically CEO/board, external counsel and your insurer — and agree a communication plan to protect employees’ rights and the business’s reputation.
Step 3 — Advise and Remediate: with the facts laid out, implement immediate controls to prevent further loss (temporary segregation of duties, dual sign-offs, hold on suspicious payments) and plan longer-term fixes (stronger vendor onboarding, automated duplicate-payment checks, periodic reconciliations). I also advise a follow-up audit or forensic review to close gaps, plus staff training and an incident response policy so future issues are detected earlier. If criminality is likely, coordinate with counsel before contacting law enforcement to ensure the evidence is handled correctly.
Fraud investigations are stressful, but they don’t have to be chaotic. By recognising common red flags early and following a structured Investigate–Report–Advise approach, you protect both your business and your people while taking steps that are legally and operationally sound. From my experience, owners who move deliberately — preserve evidence, involve the right advisors, and strengthen controls — recover faster and reduce the chance of recurrence.
If you’re concerned about financial integrity in your business, I offer confidential, practical reviews tailored to remote and multi-jurisdictional setups across Europe. Contact me to arrange a discreet initial consultation and we’ll outline the least disruptive next steps.