Business viewpoint: Take actions to control employee theft
BY SCOTT RUMLEY Business Viewspoint
Thursday, December 20, 2012
12/20/12 at 4:02 AM
It's an unfortunate truth that in des perate times even formerly trustwor thy employees will resort to desperate measures, and today's economic un certainty only increases the prevalence of employee theft and fraud.
The FBI calls employee theft the fastest growing crime in America, and the majority of these cases happen in companies with fewer than 100 employees. In another alarming statis tic, the U.S. Chamber of Commerce estimates that 75 percent of employ ees steal at least once, and half of them steal repeatedly.
Given the right set of circumstances, anyone can commit fraud. The reasons may be due to personal finance stress, the belief that no one is looking and the rationalization that "I'm only borrowing the money" or "I deserve it."
Although there is no fool-proof way to prevent fraud, here are some ideas that could help reduce the risk in your business. They involve implementing internal and external controls, helping you catch employee theft before it gets out of hand.
Division of labor: Never allow the same employee to have the ability to write checks and manage the books. Engage two employees in this task or outsource the bookkeeping element.
Job rotation: Have employees change jobs periodically, and prefer ably unannounced.
Outsource part of your internal sys tems: This allows for red flags to be raised without the offender's ability to manipulate the system.
Analyze your monthly reports and require a journal entry every month: Managers should do this to understand the fiscal health of their business and to question expendi tures that look out of line or unfamiliar.
Use preprinted checks with preprint ed check numbers: Require immediate reconciliation of bank statements and accounting for every check number.
Conduct spot checks and audits: Develop a plan and let employees know that a check or audit of what is being done in the back office can and will happen at any time.
Zero tolerance: There should be no tolerance for employee theft/fraud, no matter how small.
The gist of the story is that you should take responsibility to look and let your employees know you're looking.
Original Print Headline: Take actions to control employee theft
Scott Rumley is owner of the Tulsa branch of BookKeeping Express.
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