Employee theft or fraud is not new in the mainstream world; in fact, it has been prevalent for centuries, which makes it a common activity among most businesses. There is no denying the fact that fraudulent activities have always been costly to businesses. Survival after losing a significant portion of total revenues and profits in thefts or frauds is no easy feat. Recovering from this type of crisis is extremely difficult in today’s workplace. According to a study, employee theft, fraud, or embezzlement is the number one reason or cause of loss of inventory across the globe.
How Big Is The Problem?
Statistics reveal that employee theft or fraud is making business owners from every corner of the world lose a whopping $300 billion in total revenues and profits each year. In the US alone, the figure stretches up to $60 billion, making it one of the most widespread challenges faced by the business sector at all times. Business owners may have been lucky to conceive a winning business idea, but what about business management? Isn’t that important as well? For sure, it is! The truth is, business owners have to deal with a variety of threats throughout the business journey, and one of the most common threats is employee theft or fraud.
Business owners can only feel safe and secure in today’s business world if they minimize potential threats and bring them near to none. All salutations to superior technology and advanced tools and techniques that have helped us prevent employee theft, larceny, embezzlement, stealing, shoplifting, that all come under the umbrella of fraud. So, it makes me feel safe to say that employee theft or fraud is a very serious problem that is causing businesses to lose a significant portion of annual sales and profits. It can even kick a business out of the competitive race, which means failing market share and hence resulting in a gradual demise of the company.
What about Small Businesses?
Small businesses are more vulnerable to employee fraud or theft due to their defenseless business processes. They perhaps lack wisdom (financial and management) to protect their business from internal and external threats or frauds that restricts them to grow and expand their business operations. On the other hand, catching culprits or perpetrators involved is no easy feat at all. Employees usually who steal from you, typically work in groups (involving co-workers in any sort of fraudulent activity), which makes it even harder to catch the main culprit or the entire lot. So, you need to make efforts to minimize potential threats to employee theft or fraud start to ruin your entire business.
Why And Which Employees Usually Have The Reputation To Steal From Their Employers?
Every year businesses lose billions of dollars to employee theft and fraud, and the number of incidents is constantly rising. Besides having innovative tools, technology, and prevention methods, the rise is often seen as strange yet alarming. As per 10-10-80 rule, 10% of people will steal at any opportunity at hand, 10% will never steal from their employers, and 80% people will evaluate a particular opportunity at hand, give it a rational thought and then decide what to do with it. The good news is employers can change the perception of their employees in that 80% rule, those having second thoughts about stealing and can prevent them from involving in any fraudulent activity or misadventure, leading to repercussions.
Not every employee intends to steal from his/her employer. According to a study conducted by ACFE, employee theft or fraud is often seen in the age bracket of 31-49. This indicates that elderly employees steal from their employers more than their young counterparts.
Business owners need to take security measures if they expect to prevent employee theft and fraud within their company. They can do this by holding meetings regularly and set a precedent with a zero-tolerance policy for perpetrators. They can also hire private investigators to catch employee(s) involved in any fraudulent activity and hire accountants for analyzing bookkeeping records or business books.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.