5 Methods to Protect Your Business From Employee Theft
Almost every business loses a significant sum of money to employee theft which has now become a concerning matter. Employees are stealing in excess of $50 billion from their employers every year causing businesses to lose about 7% of their annual revenue. 75% of all employees have been involved in at least one incident of employee theft which is also one of the causes of bankruptcies which presently stand at 33%.
The figures mentioned can certainly scare a business owner but there is no reason for them to be discouraged. Business owners can easily learn how to control the activities in their business every day and manage the processes effectively for minimizing employee theft.
Theft of cash, payroll, merchandise, and data are the most common forms of employee theft. The employees who are most involved in these acts are usually the ones that are most trusted. Employees such as bookkeepers have access to the records of the business, cash and important data and can cause the business immense damage. Hacking is another method which is being adopted and therefore businesses always need to be one step ahead in order to thwart employee theft.
How Can Businesses Protect Themselves From Employee Theft?
Actions To Safeguard The Property of the Business
Businesses must restrict access to computer data, keys, inventory, supplies and merchandise despite this might not be entirely possible. They must create passwords for their computers and frequently change them.
Cash is always the easiest to steal but inventory losses and merchandise stolen for sale can cause huge losses if a determined employee manages to whisk it away. A growing concern among employees is also the theft of business identity which they need to protect at all costs.
Follow The Written Procedures Which Have Been Created
The employees must be made aware of what they can expect from their jobs. Business owners are required to create an atmosphere of efficiency which will help them to keep track of their business transactions. They must keep track of all documents and forms and also ensure they have proper documents when they are making a payment of any kind to the authorized person.
Keeping Track Of the Inventory
All businesses have inventories of two types belonging to office supplies and products. The inventory of supplies is usually pilfered by employees who take small items leading to the final figure. Business owners may not consider keeping track of such items but will certainly come across problems when they notice printer cartridges being pilfered as they are expensive.
The product inventory also deserves proper attention especially with items which are highly valued or that do not have sales in large volumes. Businesses must also have inventories of obsolete and damaged products because they too can fetch a value for the business.
Employee Responsibilities Must Be Divided And Monitored To Prevent Employee Theft
Employees that are assigned to handle the task of bookkeeping and merchandise must be advised to follow a two-step process and every step must be divided between the responsible individuals.
The employee assigned to reconcile bank accounts should not be assigned the duties of paying the bills. Employees receiving merchandise for sale must not be given the responsibility to decide whether an item is obsolete and needs to be scrapped.
Employee Theft Prevention Measures Must Be Reviewed Periodically
Businesses cannot afford to take prevention measures without reviewing them periodically. The business owner and other responsible individuals within the business must spare time every week to ensure that conduct a review.
They must use the written procedures which they created for the employee and make sure that everything that is concerning them is addressed appropriately. They can set key measures to ensure any slippage remains within a reasonable range. The turnover of the inventory must also be compared with that of the previous years for detecting higher than average or lower than average sales.
The methods suggested will definitely look time-consuming and may also appear as expensive. However, businesses must understand that in reality, it takes less time and the costs are affordable especially if they consider the amount of money they can lose to employee theft.
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