Running a small business is hard enough without having to worry about trusted employees stealing from your company.
Unfortunately, employee theft is a reality which all small business owners must confront.
According to a recent study done by the Association of Certified Fraud Examiners (“ACFE”), the median loss in the United States related to one workplace fraud incident is $120,000.00.
Companies that lack anti-fraud controls suffer even greater losses.
While no system of internal controls can guarantee protection against employee embezzlement, a few basic measures can reduce the likelihood and magnitude of employee theft.
Separate Duties. Many small businesses have one person fulfill all accounting or bookkeeping functions.
This invites trouble because no one is watching the gatekeeper.
Since most embezzlements involve forged or unauthorized checks, a good practice is to have different employees responsible for recording and processing a transaction.
Requiring two signatures on every check also adds a second layer of accountability.
Review Bank Statements. With all the responsibilities heaped on business owners, the thought of spending time reviewing bank statements seems daunting.
However, getting in the habit of reviewing payroll or office expenses can help detect out of the ordinary transactions.
This also warns employees wrongful conduct will be scrutinized.
Talk to Your Bank. Meet with your bank’s branch manager to discuss your regular banking practices.
This will hopefully help the bank identify odd banking occurrences, such as delayed deposits or deposits reduced by cash returned to the person making the deposit.
In such situations, your bank should notify a top level designated person of the occurrence.
Get Insurance. Many business owners do not consider insuring against employee theft.
Given the statistics, however, it is worth sitting down with your carrier to discuss specific available crime policies or theft riders.
It is easy for busy businesses to push internal audits and implementation of safeguards to the bottom of the list.
However, implementing basic proactive controls can drastically reduce the chances of employee theft.
FOS’s attorneys can work with you to prepare anti-theft policies and procedures.
They are also available to provide an in-house preventative workshop for your business.
