Entire world loses 5% of its revenue to employee frauds, whereas the U.S alone contributes to 7 % of revenue loss to fraud. Companies incur a loss when they are not vigilant and lack prevention policies. This lack of check and balance causes employees to get away with money or corporate intel.
To prevent such instances you need to be aware of the common employee thefts.
Organizations have huge amounts of cash lying around in their tills and petty cash for expenses that incur on a daily basis. Dishonest employees may be slipping cash in their pockets without the knowledge of upper management. This theft can be masked by overstating receipts, or recording false expenditures.
A missing t-shirt from a wrack may be overlooked, but a loss of an expensive machinery part from the warehouse can cost your business thousands of dollars. This makes inspection and invigilation necessary at each level of supply chain.
This may seem like a small or a petty offense, but can cost your company a lot of money you order stationary supplies on a monthly basis. Apart from small objects like pens or staplers, an employee who is leaving the company soon may start stealing expensive office supplies such as, equipment or furniture.
Companies pay employees for his skills and time, and if an employee does not designate the allotted time to company’s work then he is stealing time and money. This offense is carried out by spending extra time on personal calls, extra breaks, wasting time, and reimbursing false travel and food expense from the company. All these acts are common at workplace; if they are not addressed promptly a negative culture may slowly start brewing in your organization.
Employees can steal time from their payroll and receive full pay for the day if vigorous check and balance is not kept.
Employee records, formulas, vendors, and client details are pieces of sensitive information that should not be shared openly. A mole in the system can expose confidential information to your competitor and cost you millions of dollars.
Rotation of roles prevents a person from formulating schemes in a single department. Rotations are announced periodically, this makes employees more conscious of their actions. People from other department take-over the work and review it for better understanding, this increases the chances of highlighting any anomalies.
When dealing with cash, make sure division of labor is in place. Don’t let the same employee manage books and write checks. Moreover, ask another employee to balance the petty cash amount each day.
If there is a sudden increase in your company’s outstanding receivable and bad debts, then your company needs to fully investigate the matter. Chances of theft are high if various receivable turn into bad debts. You should conduct a bi-monthly review of your receivable and bad debt and catch the problem before it escalates.
Managers should check monthly journal entries for anomalies or discrepancies. Apart from this, companies should have serial number printed checks that can be reconciled immediately with the bank statement.
Moreover, ask your employees to attach all the relevant documents to the check. This makes a transaction authentic and easier to re-trace.
Having proper policies and a comprehensive system in place to detect and prevent fraud reduces company loses. You can conduct audits and introduce security protocols to maintain safety of company’s assets.
In order to make theft and fraud redundant in your company you can also outsource payroll or bookkeeping. This will reduce the chances of manipulation of record and make your data more secure.
Dealing with theft and it aftermath can be troublesome for a business. Get help from DFRIHR for strategically solution for HR issues and conflict resolution. We provide human resource consultancy services to businesses and individual. Call 1-877-803-3486 to get instant solutions.