March 06, 2019 | Posted in:

Squelch Internal Theft

Think your employees aren’t stealing from you? Think again. The majority of embezzlement cases occur at small- to mid-sized companies and the average incident costs more than $350,000.

Unfortunately, most internal theft isn’t obvious. Fortunately, your business can establish effective safeguards including protections for three of the most common embezzlement schemes.

1. Abuse of company credit cards.

To prevent employees from using the company credit card for personal purchases:
• Restrict access to company credit cards.
• Require receipts for all credit card charges.
• Periodically review receipts for compliance with written policies.

2. Diversion of company funds for personal use.

Detailed schemes for dipping into company coffers range from fake vendors to creating “ghost” employees. To foil such frauds:
• Rotate tasks among personnel.
• Review vendor lists to identify phony businesses.
• Compare employee lists with payroll disbursements.

3. Theft of inventory and equipment.

One common way workers steal is by placing materials or equipment in company garbage bins and retrieving them after hours. To control against this:
• Conduct periodic inspections as employees leave the premises.
• Restrict access to company refuse containers.
• Install closed-circuit cameras at vulnerable locations.

Of course, even the strongest controls can be circumvented. Your company’s most basic and effective control starts with hiring and employing workers with a proven history of integrity. Also be sure to conduct thorough background checks before you finalize a hire.




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