How Ratio's financial analysis detected AED 21,000 in fraudulent supplier charges
Following the first quarter of a newly established business in the Emirate of Abu Dhabi, Ratio began supporting a local female-owned salon by providing comprehensive accounting and bookkeeping services, including monthly financial analysis.
As the salon began to ramp up revenue, costs increased in parallel. The business owner needed reliable financial oversight to ensure healthy margins during this critical growth phase.
Towards the end of the second quarter, Ratio noticed that margins were decreasing as expenses increased—an unusual pattern for a growing business with rising revenue.
Ratio broke down purchases and compared them month-on-month, identifying that supplier bills had increased disproportionately to business activity levels.
While reconciling supplier bills against inventory purchased and consumed, Ratio noticed stable revenue for specific services but increasing costs related to those same services.
Upon reviewing supplier bills that were manually written, Ratio identified different handwriting on several items, which appeared at marked-up prices.
Ratio contacted the supplier directly and requested a full statement of accounts to verify all transactions and amounts.
The supplier statement revealed a significant mismatch with the salon's records, showing a variance of over AED 21,000 in total figures.
Ratio verified assumptions and figures with the accountant's superior to ensure accuracy before approaching the business owner.
Once verified, the accountant contacted the business owner and presented a detailed breakdown of the discrepancies and evidence.
The business owner cross-referenced payment dates with security camera footage from the reception desk, confirming the fraud.
Internal investigation revealed that an employee of the salon had systematically swindled over AED 21,000 over the course of 2-3 months through counterfeit supplier invoices.
At the owner's decision, the employee was handed over to the authorities to open a criminal case. The full amount of AED 21,000 was returned to the business owner, protecting the salon's financial health.
"Without Ratio's detailed monthly reconciliation and financial analysis, this fraud could have continued undetected for months or years. Their attention to detail and proactive investigation saved my business from significant financial loss."
Business Owner, Female-Owned Salon, Abu Dhabi
Ensure that suppliers are paid through cheque or wire transfer with credit terms if permissible. Avoid cash payments that lack audit trails.
Conduct thorough reconciliation of both financial records and physical inventory to identify discrepancies early.
Keep maximum cash balance within the cash register limited to reduce exposure and temptation for internal fraud.
Maintain a petty cash slip sheet to ensure all minor expenses are properly recorded and traceable.
Periodically verify supplier invoices directly with suppliers to detect counterfeit or altered documentation.
Third-party financial oversight provides independent verification and professional fraud detection capabilities.
This case demonstrates Ratio's comprehensive approach to financial security beyond standard bookkeeping:
Month-on-month comparison of all financial transactions and supplier invoices
Cross-verification of purchases against actual inventory consumption
Identification of unusual patterns in costs, margins, and supplier relationships
Direct supplier contact to verify invoices and statements independently
Internal verification process before escalating concerns to clients
Comprehensive documentation to support legal action when necessary
Ratio's detailed financial oversight and reconciliation services provide the fraud detection your business needs.
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