Reducing Employee Theft

According to a retail business study, about 75 percent of employees steal, or have stolen experience by their employers. The same study estimates that corporate bankruptcies might be attributed to employee theft.

Employee theft could come in many different sizes and types, whether it’s taking home office supplies, skimming from the registers, inside office robberies, or bookkeeping and computer fraud. The reality is that business owners are wise to have controls that can help minimize and prevent employee theft.

Want to? Here are a few tips to protect the business from employee theft :

1. Hire Honest People

It might sound obvious, but best defense against employee theft is to hire honest employees. Looking for honest employees can do through screen all job applicants by requiring a detailed application, checking references, and conducting a face-to-face interview. Furthermore, the company can require a criminal background check and credit account check. Sometimes this last requests will cause an undesirable candidate withdraw their application.

2. Internal Controls

Company policy changes and adjustments on everyday operations could reduce the number of employee. Consider this following policy:

• Jobs such as issuing checks, making deposits, inventory management, and reconciling accounts should be kept separate. Require a second signature for disbursement checks.
• Individuals who have access to company books or purchasing/paying jobs should be monitored. Such employees should be granted only as much access as they need to perform their jobs.
• Whenever possible, rotate tasks among employees.
• Read all journal entries review carefully, and be alert to large numbers of unnecessary entries.
• Consider to hire an external CPA firm to perform annual audit.
• Use passwords to access computers or networks, and change their passwords annually. Do not forget to log off the computer whenever employee leave their desks.
• Create backup copies of the accounting records, and store the copies off the premises. It is preventing if someone's changing the books, you’ll be able to conduct a thorough comparison.
• Conduct inventory audits of all property regularly.

3. Security

We trust our employees with all assets, but that doesn’t mean we can’t maintain an added level of security control. Here’s tips for security control:

• Consider using a keycard system or a digital PIN system to replace a traditional key and lock. Both grant more control over who does and does not have access to the business, and both provide more information regarding when and how your assets has been accessed.
• If using a traditional key and lock system, maintain control over access to building keys. Never have keys out and available for any employee to use. Keep all spares locked up.
• Make sure all store, warehouse, and office keys cannot be duplicated without the master.
• Keep a record of those employees who have been assigned keys. It will decrease the likelihood of keys disappearing, and it will also help the police if one of our assets ever have a break-in.

Change locks whenever an employee who has been assigned keys leaves or is dismissed.