Safeguarding Your Business Against Employee Fraud

Steps to Prevent Fraud in the Workplace

Fraud can happen within businesses of all types and sizes. The revenue, reputation, and long-term health of your business could be at risk unless you take action to prevent employee fraud. While no business owner wants to believe that their team could hurt the company in such a way, employee fraud continues to be an issue. Here are a few ways to deter employee fraud.

Know your employees. Be alert to key indicators of potential theft, such as:

  • Sudden, apparent devotion to work and leaving late
  • Lifestyles well above salary levels
  • Strong objections to procedural changes related to financial, inventory or supply matters
  • Drugs and alcohol abuse
  • Financial trouble at home

Always perform background checks on potential hires. Checking references is one important step.

Safeguard your property. Restrict access to keys, computer data, passwords, inventory, supplies, and stock. Change your passwords frequently, ensuring to use strong ones. Generally, inventory and merchandise are targeted, even though cash is easiest to steal.

Create written procedures. Develop a procedure for each job role so that employees know what to expect. This helps to create an atmosphere of efficiency that will help you track all business transactions. Additionally, ensure that your employees read and agree on policies that protect your business. Place these policies around the workplace to remind them that they agreed not to steal from the company.

Divide up duties. There should be no one single person handling finances or merchandise in and out of the business. Establish two-step processes and then divide the steps between two people. For example, the employee who does your bank reconciliation should not be the person paying the bills.

Review often. Conduct routine and unscheduled checks on high-risk areas of your business, including the financial and inventory departments for vulnerabilities and possible fraudulent activities.

For all of your quality business insurance policies, contact the team at Premier Risk Insurance. Our experts guide you in choosing the right coverages to protect your business and wallet. Serving Long Island, NY, contact us today.

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