Protect Your Business from Employee Fraud and Theft with These Simple Steps
Small business owners face an array of threats when it comes to employee fraud and theft. It’s estimated that employee theft costs US businesses over $50 billion a year, with the majority of those losses coming from small businesses. While no one likes to think about having their employees taking advantage of them, there are several steps that small business owners can take to help protect themselves from fraud or theft.
First and foremost, hire carefully. When hiring new employees, it’s important to conduct thorough background checks to ensure successful applicants do not have a history of criminal behavior or unethical practices in the workplace. Additionally, it’s good practice to double-check references and ask questions about past employment situations that could potentially be indicative of potential future problems.
Next, set clear expectations for all employees regarding financial responsibilities such as handling cash or company credit cards. Provide necessary training so everyone knows how money should be managed and tracked. Clearly define roles so every task is assigned to the right person and physical access to funds is limited only to approved personnel.
It’s also wise to invest in resources that can help detect or prevent fraud. Consider implementing a system (manual or electronic) that monitors employee transactions such as making deposits into the company bank account or large between departments within the company. Use surveillance systems like video security cameras and alarms if possible in work areas with significant amounts of cash activity. And maintain other safeguards such as requiring two signatures for check approvals or randomly assigning auditing tasks for internal personnel reviews so problems can be quickly identified if they occur.
Finally, establish product-handling procedures such as logs for tracking inventory movement throughout facilities and create an environment where any suspicious behavior can be easily reported by employees without fear of retribution or reprisal from fellow team members who may accidentally stumble across a potential issue during their daily duties. Make sure everyone involved understands their roles both inside and outside the workplace when it comes to identifying potentially fraudulent activities then reinforce those expectations regularly through meetings and email communications so everyone knows what is at stake if suspicious activity occurs unchecked.
By taking these simple steps small business owners can significantly reduce their chances of being victims of employee fraud while creating safe working environments where honesty is rewarded instead of punished. However, if despite all precautions taken something does still happen you may want to contact an experienced attorney who can help identify any laws which may apply during your situation so you know exactly what remedies are available before proceeding with legal action against those responsible for any wrongdoings committed against your business enterprise.