Employee theft and embezzlement are the main reasons behind the demise of most start-ups. Entrepreneurial business ventures are initiated mainly by inexperienced individuals who lack business management knowledge, skills, and expertise. However, business management doesn’t have to be that difficult to master. All you need to do is learn the art of the game and know your employees well enough to create a powerful prevention plan against employee theft and embezzlement.
Unusual habits and changing behavior of employees, plus a lack of timeliness in updating and reconciling accounting records, reveal a lot about an employee and their commitment to their work. Detecting and preventing employee theft and embezzlement has become the need of the hour. Companies are even ready to hire professionals who devise creative ways to catch the culprits for their misconduct. According to studies, business owners worldwide lose about 6% of their annual revenues and profits to employee embezzlement.
Blind Trust Has Its Repercussions
You might be surprised that trusted and established employees steal more from companies. How can a business expect to witness significant returns if their trusted partners, stakeholders, or employees will steal from their business? This is alarming for your company’s fate because it will slowly and gradually eat your business altogether if you do not stop it. In other words, unfortunately, employee theft and embezzlement are something that you will constantly battle throughout running your business. There is certainly no magic formula that will stop it right away, but your constant efforts will undoubtedly positively impact you!
We, as humans, tend to fall prey to our desires. We look for an easy way to fulfill our wants and needs, often leading us to commit fraudulent activities like stealing supplies from homes and offices. This activity has to be stopped no matter what because it will ruin our motivation to earn legitimate money, which is hard to gain back!
What to Do To Prevent Employee Theft and Embezzlement
According to studies, 55% of fraudulent activities result from group activities involving others to help commit financial crimes. This information bears testimony that employee theft and embezzlement are challenging for an individual and a lot easier for those who work in groups for mutual gains, financial or personal. Certain things can help you protect your business against embezzlement if executed perfectly, such as knowing and supervising your employees, maintaining control over financial matters, cross-checking or auditing business bookkeeping, integrating and incorporating computer software for digital tracking, separating financial duties of employees and last, but not least, checking stock inventory regularly.
Forms of Employee Theft and Embezzlement
People who steal from you are clever and smart individuals who will always think one step ahead of you. You must constantly upgrade and change your measuring mechanism for evaluating your employees’ misconduct, as they know your company inside and out. Employee theft and embezzlement typically exist in three forms: theft of cash, robbery of goods, and theft of sensitive information.
What To Do For Getting Things Back On The Track
You need to discourage these fraudulent activities as much as you can because it will help you save a lot of money in the long run. Instead of your company policy, you may document every sale/purchase for your records, create and follow up on written procedures for ideal business management, keep track of inventory at your capacity, and periodically review employee theft and embezzlement prevention measures. According to experts, if each employee is held responsible for their deeds, there are fewer chances of theft, fraud, shoplifting, embezzlement, and other fraudulent activity incidents.
Suppose all preventive measures fail to get things back on track. In that case, you should consider hiring a professional accounting, bookkeeping, or auditing expert who will sketch a clear picture of your finances to devise a prevention plan to stop employee theft and embezzlement.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.