Learn what to look for to protect your business
Employee theft rarely looks like the photo above. Instead, it’s usually a pattern of stealing that quickly adds up! Many businesses do not have the checks and balances that an expert CPA would put in place to ensure financial transparency and detect theft before it becomes habitual and long-term. If an employee steals a small amount, often they’ll figure out they can steal it again and again—which adds up over time!
Here are six ways to spot employee theft. Of course, #1 is the most important!
- You (or Lesemann CPAs) spot inconsistencies in your accounts receivable.
A good CPA can spot excessive or understated cash transactions, unexplained increases in expenses, excessive shrinkage, and patterns of change in your day-to-day bookkeeping that signal that an employee is stealing.
- An employee suddenly is making purchases that are well beyond their means.
Simply put, people who steal are itching to spend. If you notice luxury items that seem beyond what an employee can afford, that’s a red flag.
- An employee is having financial difficulties.
Unfortunately, when some employees are faced with bills they can’t pay, they “borrow” from their employer, which then turns into a long-term strategy to stay solvent.
- An employee is secretive.
Maybe when you walk by they minimize their screen. Or perhaps when you ask for an easy-to-retrieve report or document, there are excessive delays. Are they reluctant to have you review their work? All of these are red flags.
- Another employee blows the whistle.
Take employee complaints seriously as often employees are your eyes and ears when others are leaving early, taking cash payments and then not recording them, or using the supply closet to stock their home.
- An employee refuses to follow the checks and balances you have in place.
This can be as simple as refusing to take a second person to the bank with them to make a deposit or not filling out essential paperwork. If you see any of these red flags in your business, always investigate. But, again, the most important thing to do is hire Lesemann CPAs to put the checks and balances in place that ensure financial transparency.
The success of your business depends on smart and effective financial processes.