Employee theft and fraud is a big issue in every workplace, even if the managers and business owners don’t realize it. In fact, companies lose revenue every single year because of internal fraud or theft, to the tune of about 5% of their reported profits. That means that if your company grosses $1 million this year, you won’t see about $50,000 of that revenue. In the grand scheme of things, five percent doesn’t seem like much, but that money is yours and deserves to be on your bottom line where it belongs. So fraud examiner service from professional business consultants is must for businesses.
Internal theft happens a lot more often than most owners and managers realize. Small businesses and mid-size businesses are often hit the hardest because they don’t have the huge financial safety net that larger companies and corporations have in place. These bigger companies deal with theft too, but it’s often even harder to notice because of the size of the business.
How Does Theft Happen?
While there are many different actions or situations that would qualify as fraud or theft in a business, there are some types of fraud that are just more common than others. Those include:
In a business where there is cash on hand, this is often the easiest and fastest way for employees to commit theft. They will take cash from a register, safe, or petty cash drawer and you won’t notice it’s missing until you count the money. That could be at the end of the night, or even days later in some cases. Cash is quick and easy, but it’s also easily tracked so it’s not a first choice.
Employees who commit fraud often do so under the guise that they are performing a price correction or refund for a customer. They might even ring up an item for more than it should cost, charge the customer the regular price, and keep the difference. This is more difficult to track than just taking cash, and can be difficult to prove, as well.
Employees will sometimes falsify records or documentation to get paid for work that they didn’t do or expenses that they didn’t actually use for work-related activities or occasions. For example, some salesmen will write off every dinner they have as a business dinner so that they don’t have to pay out of pocket, even if they’re dining alone or with family. Some employees will modify time cards, clock in early or late, or try to defraud the company by modifying their schedule and getting more money than they deserve for their time on the clock.
Supplies, even though they are minimal in value, are still an asset of your business. Employees are notorious for pocketing pens, staples, post-it notes, and other office supplies while at work. They might take things over time, slowly, or they might actually stock up on their day of resignation. In some cases, employees will steal more expensive supplies like furniture, electronics, and computer equipment. These thefts, of course, are easier to identify. But to prevent such things, approaching an experienced business consulting service is a wise option.
Whether or not an employee has signed an NDA (non-disclosure agreement) or Non-Compete form, they may intentionally steal information that can benefit themselves or the competition. Theft of customer lists, office documents, proprietary information, and other data is a risk to any business, and one of the worst types of fraud because of its damaging effect.
Prevention is the key to stopping employee theft and workplace fraud. You need to make sure that your employees know that you are aware of the issue and that you won’t stand for it. Now that you know where to look, you will be able to stop fraud when it starts, which is much better than waiting the typical 14 months it takes for fraud to be discovered in most organizations.
Author Bio:Jack Copus is a freelance writer and a blogger. He has extensive knowledge of various niche topics and subjects. When not writing, Jack likes reading and loves dogs. You can follow him on: https://www.linkedin.com/pub/jack-copus/19/89a/b75