Employee theft and embezzlement are the main reasons behind the demise of most start-ups. Entrepreneurial business ventures are mostly initiated 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 to know 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 if you are not going to stop it, it will slowly and gradually eat your business completely. In other words, unfortunately, employee theft and embezzlement is 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 surely 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, which often leads 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 a group activity, which means involving others to help commit financial crimes. This information bears testimony that employee theft and embezzlement are tough 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 most steal from you are clever and smart individuals who will always think one step ahead of you, which means you need to constantly upgrade and change your measuring mechanism for evaluating your employees’ misconduct as they know your company inside and out. Employee theft and embezzlement normally exist in three forms; theft of cash, theft of goods, and sensitive information theft.
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 his/her 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 for further coming up with 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.