Employee Theft: Proactive Ways To Deter This Common Problem
While it can be difficult for any business owner to think that any of their employees would attempt to steal or defraud their company, it happens far too often. In fact, recent statistics on employee theft show just how common the problem really is.
According to research conducted in April of 2017 by Statistic Brain, 75% of all employees are believed to have stolen from an employer at least once. Even more shocking is that one-third of all business bankruptcies are directly related to employee theft. If you are a small business owner concerned about employee theft and fraud, the following information can help you protect your business and your financial livelihood.
Divide financial responsibilities
One of the most common employee theft problems occurs when one employee handles both incoming and outgoing money. For example, in a very small company, a single person might be in charge of managing the business accounts, including having financial access to write checks, use a company credit card, or initiate financial transfers.
Companies can help to deter this type of theft by dividing financial responsibilities, to ensure that one person handles any incoming funds and another handles outgoing money, such as paying bills and balancing the company checkbook. While this cannot guarantee that employee theft will not happen, it does create another level of protection for the employer.
Provide better oversight
Another step that businesses can take to help deter employee theft is to provide better oversight in key areas of the business. Some good examples include:
- auditing cash drawers and petty office funds on a frequent, unannounced basis
- using an independent auditor to periodically assess the company's financial records
- installing security cameras at cash registers and areas where money is taken in or paid out
- utilizing a properly authorized purchase order system to ensure that each purchase is an approved one
- making sure that all checks issued have sequential numbers and are tracked to ensure they were correctly dispersed
- limiting use of company credit cards to key employees and tracking these expenditures more closely
When taking steps to deter employee theft in your business, it is important to remember that it can happen on every level. Adding additional layers of protective oversight can help to deter this problem from happening and help employers limit the damage by taking action more quickly when it does.
For more information about protecting your business from the potential damage of employee theft and fraud, take time to speak with your business insurance provider today. Companies such as Cache Valley Insurance Inc can offer more information.