Five Ways to Discourage Employee Theft From Your Small Business
Business owners never want to think that their employees would steal from them, yet a Certified Fraud Examiners’ report estimated that a business loses 5 percent of revenues each year to fraud, with the median loss at $150,000. Small businesses with fewer than 100 employees feel the biggest impact.
Fraud and theft are carried out typically by employees who have worked at a company for several years. It’s the trusted bookkeeper who skims $1 million off the books, a long-time city employee who uses the city charge card to buy personal items, a bank employee who withdraws money from customer accounts, a front desk employee who pockets cash payments.
Many employees resort to stealing to pay off mounting bills, to finance a drug or alcohol addiction, to enjoy a lifestyle beyond their means or they simply steal because they can.
Employee theft is a crime of opportunity. Here are five ways to discourage employee from pilfering from your business.
–Conduct background checks on new hires. Just as important, conduct regular background checks on current employees to identify criminal or financial activity that could be red flags.
–Install video cameras that monitor the entire workspace. Just knowing that they are being watched can keep most unscrupulous employees on their best behavior.
–Regularly audit the records and reports that discuss the company’s finances. Instruct your outside accounting firm to look for any discrepancies or unusual postings. Make sure proper inventory tracking procedures are in place.
–Conduct employee fraud prevention classes. Your honest employees will learn how to look for and report theft. Your dishonest employees will know that your business takes theft prevention seriously.
–Hire outside security guards. Guards can observe employees who stay late (prime time for nefarious activity), monitor who is coming and going from the premises to prevent loss of merchandise or supplies and make sure employees are working when they say they are.