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All businesses can be hurt by employee theft - and when staff members steal, they're literally walking off with a portion of your profits.
One survey revealed that a third of employees would steal from their employers if they thought
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How Bad is the Problem?
Between $60 billion and $120 billion is stolen every year, studies show. That comes to an average of $500 to $1,000 per employee!
Some theft involves fraudulent acts such as stealing cash and forging or altering checks.
Some of the most damaging thefts involve software or documents that could be valuable to your competition. | they could get away with it. Another study showed that 38 percent of those surveyed had already stolen something from their companies.
What can you do to protect your business?
Start by communicating company values to your employees. Publish a code of ethics and encourage your employees to subscribe to the values of fairness, honesty, and integrity. Let them know what constitutes theft and the consequences if they are caught.
Next, review internal controls with the help of a professional. You must have an adequate system, yet managers often neglect putting one in place until serious problems arise. One simple step is to segregate duties. If you have one employee opening the mail, making the bank deposit, and entering cash entries in the journal, you obviously have a weak system of internal controls. A better system would require one employee to open the mail, another employee to list the money coming in, a third employee to enter receipts in the cash journals, and still another employee to deposit the money in the bank.
Be on the lookout for suspicious behavior among your employees. Here's one surprising clue: Workers who never take a day off might be involved in illegal activity because they're afraid they'll be discovered if someone fills in for them. In addition, be wary if there are close associations between your employees and your vendors that could make it easy to cover fraudulent transactions. If you have any doubts, your accountant can help identify and track fraud.
Finally, bond all employees who handle inventory or money. And no matter what system you have in place, don't underestimate the possibility that your employees are more creative and devious than you think.
Take action today. Make sure that - in your office - crime doesn't pay.
(For more fraud-prevention tips, click here to read our previous article, "Safeguard Your Company From the Inside")
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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