Employee Fraud and Theft: How to Protect your Investments in Addition to Insurance
Providing insurance for your business is one great way of keeping your investments safe. As a business owner, there is a lot you need to do to assist the insurance companies to protect your ventures. Your employees are a great part of your investment and you must ensure each one of them is productively conducting themselves. Many businesses have suffered losses due to theft and fraud activities carried out by the employees. According to NFIB, an employee has a higher chance of stealing from an employer compared to a non-employee. Some of the thefts are in form of;
- Diversion of business funds, also known as skimming
- Embezzlement of the inventories or the raw materials
- Inflation of expenses reports
- Tampering with checks and,
- Outright theft
Your part should be keeping the workers at bay and ensuring none of the above happens. Your insurance company will remind you to remain vigilant since they are alarmed by the huge losses that small businesses are making in this manner. Mostly, the employees who normally steal have been in the business for a long time. They know every loophole that they can take advantage of to ensure they aren’t aught. Apart from covering your business, the following are some of the things you may do:
- Know Every Employee
Knowing your employees doesn’t necessarily mean knowing all their names or having a personal interaction. It means knowing when their behaviors change or looking for several indicators of potential fraud. Some of the alert signals are;
- An employee living a lifestyle above their salary range
- Abrupt need to stay late after work or sudden devotion to their work
- Objections to adjustments in supply and inventory procedures
Although these do not guarantee cases of theft, they can help you notice when it happens. Before hiring, your insurance company will remind you to screen the employees. You should also check the references to know how they previously handled financial and inventory procedures.
- Use Computer Security Measures
Regardless of the size of your business, it is crucial to use computer systems to keep your records. Using computer software helping in tracking down how money has been spent and divert the inventories. It also restricts access to unauthorized personnel.
- Install Security Systems
Consider installing security devices that will help in monitoring the inventory and merchandise. An RFID tag is a robust system of security that discourages thieves from stealing. Contact a relevant company for such security measures.
- Control the Cash Receipts and Track the Checks
Conduct a weekly audit to balance the registered report with the sales slips. This procedure should prove that the sales slips balance with the register receipts. It could be wise to use another person for this process rather than the sales officer. When it comes to the business checks, ensure you use the pre-numbered ones and permanent ink to type the amounts. Make sure the blank checks are locked away from the employees.
With the measures mentioned above, it is easy to track all the activities that take place in the business. However, you must be careful not to make the wrong accusations since you may face a lawsuit. Ensure you verify the suspicions and use the right method to carry out the investigations. This way, you will be helping the insurance company in minimizing losses.