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   Proactive Prevention Tips

All businesses can be hurt by employee theft - and when employees steal, they're literally walking off with a portion of your profits.

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.
    • One survey revealed that a third of employees would steal from their employers if they thought 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 your internal controls with the help of your accountant. 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. If you have a very small staff, more than one function can be done by the same employee, as long as the tasks aren't consecutive. The object is to make sure more than one pair of eyes sees what comes in and goes out so that no one person can cover his or her tracks.

    Be on the lookout for suspicious behavior among your employees. Here's one surprising clue: Employees who never take a day off might seem dedicated, but their reluctance to be gone could indicate involvement in illegal activity and fear that they'll be discovered if someone fills in for them. If you have any doubts, your accountant can help identify and track fraud.

  • Finally, make sure all employees who handle inventory or money are bonded. 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.


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