Prevent Fraud & Theft: Policies & Plans

Prevent Fraud and Employee Theft - Complete Controller

Business owners often face fraud and theft each year due to their employees. The risk of fraud has increased due to the advancement of technology and the progressive development of the world market. According to research reports, organizations face a 5% loss due to fraud each year, in which internal employees commit 85% of severe fraud cases. Organizations should develop multi-layered fraud prevention strategies while keeping these statistics in view. Practice the following plans and policies to prevent fraud and employee theft in your business. CorpNet. Start A New Business Now

Practice Corporate Culture

Corporate culture defines procedures and policies that govern employees. Limitations should clearly define the organizational structure of reporting systems, the accountable person, their segregation of duties, job responsibilities, and regulations. Hire the right employees by investigating their past employment history and educational background.

Establish an Anti-Fraud Policy

A documented policy defines fraud, its prevention, and detection procedures that procedures will be implemented after proper training of all employees. Policies should communicate a zero-tolerance policy for all kinds of deception to employees. They should also be aware of actions that employees would take in case of fraud. Cubicle to Cloud virtual business

Prevent Theft of Physical Assets

Random and surprise audit system

Along with an annual and quarterly audit of assets, a system should also develop a strategy for uninformed audits. Under the pressure of random audits, employee avoids stealing and fraud.

Segregation of duties

The manager should segregate the duties of inventory management staff to prevent fraud. Purchase order issuance and receiving of stocks should be done by two different individuals.

Security cameras

The store should install CCTV cameras in inventory storage areas to prevent employee theft.

Limited Access to Inventory Storage Areas

Only authorized personnel should be allowed to enter inventory locations, and these areas need to be locked during off-hours. Keys should be issued to specified individuals only.

Prevent Check Tampering

Security of blank checks

Blank checks should not be accessible to anyone and should be locked until required for bookkeeping.

Check bank statements of the business

A review of monthly bank statements helps detect fraud in the form of tampered checks.

Prevent Expense Reimbursement Schemes

Receipts of expenses

For reimbursing expenses, demand a receipt of the amounts that the employee is claiming.

Policy for expense reimbursement

A company must have a documented expense reimbursement policy. Clear segregation of reimbursable expenses should be defined in that policy, and every employee must receive a copy of the reimbursement policy.

Comparison of expense reports

Different employees should compare expense reports submitted by additional employees to evaluate the legality of expenses. ADP. Payroll – HR – Benefits

Prevent a Billing Scheme

List of approved vendors

To prevent fraud at this level, maintain a list of approved vendors and do research to ensure the legality of the vendors. If you do not practice this simple plan, you may be paying fake companies.

List of approved prices

Vendors should also maintain an approved price list to avoid payment at higher rates.

Signed receipts

Sign a check only if a signed receipt of the product is attached.

Prevent Theft of Cash

Manager’s approval

The manager \ should always accomplish sensitive transactions after a manager’s approval only.

Monthly account statements

Regular updates of customer accounts prevent fraud at this level.

Rotation of duties

Rotation of duties and sending employees on annual leaves and vacations prevent employee theft because the employee has the terror of easy detection by others.

Bank lockers

Cash and payment handling by employees should be minimized to prevent cash theft. The company’s bank account should receive payments directly in the company’s bank account.

Surprise audit of cash

Comparing receipts can detect discrepancies in cash easily by counting the money and comparing it with tickets.

Video cameras

Install video cameras in sensitive areas where cash is handled to prevent stealing.


Fraud prevention is critical to securing your business. Following the above plans and policies in an organized manner will prevent employee theft.

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