Business holders must continually be heedful against theft, and the most familiar type of theft is by trusted financial advisers and employees.
Embezzlement is malfeasance or theft (bad actions) by workers or trusted others in a business. Most embezzlement entails the theft or diversion of company resources to the employee.
Detecting Employee Fraud and Embezzlement
Most employees who commit embezzlement or fraud exhibit revealing signs like living beyond their means, having monetary difficulties, having uncommonly close relationships with sellers, and having unnecessary control issues. If you are vigilant and alert, you may be able to perceive and avert these business losses. This is a two-division solution:
Be Watchful: Look for These Warning Signs given by Steve Sorensen Embezzlement:
- An employee who refuses to take retreat (afraid that theft will be detected by substitution)
- An employee who wants to take work home
- An employee who persistently works overtime
- Petty cash vanishing too quickly
- Excessive personal spending (trips, new cars) by an employee whose income cannot support these profligacies. The employee may be re-selling objects or just enjoying the good life at your outlay.
- Excessive expenses for employee travel
- Hastily disappearing office supplies. If it seems you are spending more and more on office kinds of stuffs, they may be going home with workers.
- Employees who have close relationships with sellers. Keep an eye out for workers who often lunch with sellers or who are related to self-regulating contractors who do work for your business.
To be conscious of the signs can aid you to know where to focus your analysis.
Preventing Employee Embezzlement and Theft
Knowing the signs of worker losses is not enough. You must be able to find out particularly whether employees are doing. Here are some inner controls (accounting management techniques) you can set up to find out what is going on:
- Deposit every day and merge monthly. Leaving cash sitting around is too alluring for some employees, and merging the bank statement each month helps you catch indiscretions sooner rather than later.
- Separate financial duties of employees. For example, the employee who writes the checks should not be the employee who reconciles the bank statement.
- Keep track of minor cash. The money in a cash drawer can prove too appealing for some employees. Require that all trivial cash transactions have a petty cash log or slip to support them, and involve two signatures on petty cash restock checks.
Consult a CPA Attorney
Before something takes place, spend some time talking with a CPA-attorney and know how Steve Sorensen Embezzlement highlights it, someone who is acquainted with employment laws and how to deal with worker issues. Find out your civil liberties as an employer, how to deal with suspected embezzlement or theft, how to communicate about this issue with the journalists and other employees, and how to impeach an employee.
If you suspect an employee is embezzling or stealing from you, your first call should be to a CPA-attorney, but it is much better if you have a rapport with someone and you know the general outlines of dealing with employee embezzlement and theft.
