With so many business activities taking place on a typical day, it’s easy for inappropriate expenses to become approved and fall through the cracks.
It is important for managers to review financial and sales records to reduce potential employee thefts. By reconciling all accounts, spotting any discrepancy can be done quickly. When combating frauds, it is important to address potential vulnerabilities inside the organisation. Deliberately or not, it is fairly easy for some employees to embezzle your company’s money.
With that in mind, we are going to take a look at some ways to identify and prevent potential internal frauds in your small business:
Although employee fraud is common, it is sometimes accidental. Employees may not have bad intentions, but negligence may cause them to share sensitive information unintentionally. Crucial customers’ data could be left unprotected for a period of time. The most common way to prevent accidental slip-ups is by limiting access to any critical data. Lower-level employees should have more limited authorisation to access and use of sensitive data. Small businesses must plug potential holes and prevent important details from falling into the wrong hands.
It is inherently tempting for employees to steal cash if it’s left unguarded and easily accessible. Money may go missing, although it’s handled by the most trusted team in the company. The most sensible thing to do is to eliminate any opportunity to sneak money out of the workplace. Only a few people should have access to the cash register. Make sure that it could be opened only by the cashier and a supervisor. At the end of the day, everyone must reconcile the amount of money and receipts. It is easier to prevent cash frauds by encouraging customers to adopt cashless payment methods, such as debit cards, credit cards and NFC. There must be an integrated payment system that tracks outgoing expenses and incoming sales.
With company-issued debit and credit cards, some employees may tend to spend liberally. Small business owners shouldn’t give out company credit cards easily to employees. Only give cards to the most trusted employees and make sure they show receipts as proofs of transactions.
In small businesses that use timeslips to determine attendance, employees may adjust timecards to make it look as if they spend more time at work. During the pandemic, it is easier for remote workers to take advantage of this vulnerability. Small businesses should assign someone to review time logs carefully. During remote working, employees could be required to continuously video stream their presence in front of the computer.
Contact Dave Kearns
To learn more about employee fraud and how you can identify and prevent it, contact Dave Kearns today and speak with the industry’s foremost expert on employee dishonesty.
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