How can the risk of the theft of cash and customer checks be stolen be minimized?
Accounting & Audit Show All business owners want to believe that the people they hire, entrust to do work for them, and pay would never betray them, the company, or their coworkers by stealing from the business. Unfortunately, the statistics say otherwise. Apr. 05, 2022
All business owners want to believe that the people they hire, entrust to do work for them, and pay would never betray them, the company, or their coworkers by stealing from the business. Unfortunately, the statistics say otherwise. Employee theft is a significant problem and a risk that every business—large and small—faces. What Drives Employees to Steal? The so-called 10-80-10 rule says that 10% of people are ethical in all situations and will never steal from their employer, 80% will steal under the right conditions, and 10% have little or no ethics and will steal whenever an opportunity presents itself. It is disheartening to think that 90% of your workforce is a theft risk. The good news is that you can take steps to dissuade the 80% from considering stealing and minimize the opportunities available to the unethical 10%. Your first step should be to understand what drives employees in the 80% group to steal. Several factors influence this decision, including: ● Motive. An employee who has never stolen from you might consider it if circumstances in their life change. For example, they might be saddled with unexpected bills, develop an addiction, or become jealous of the possessions or lifestyle of others. ● Opportunity. An employee may be more likely to steal if they discover that their company does a poor job of tracking the cash flowing into and out of the business and that consequently, their risk of being caught is minimal. ● Rationalization. People who are generally honest can be swayed by the stories they tell themselves. For example, they may start to see themselves as unappreciated, deserving of more than they get, just one of many who steal from the company, etc. They may also tell themselves that the company’s small loss would be a big gain for them, which justifies their actions. If you view your employees and your company’s operations through this lens, you will likely see areas where you can improve your security posture. Effective Theft-Prevention Tactics Employee theft comes in many forms, including stealing physical property, digital crimes like diverting money from company accounts, and employees collecting pay for time they don’t work, such as when a person clocks-in their friend who is taking an extended lunch. Fortunately, businesses can take the 12 actions below to minimize the risk and lower the incidence of employee theft.
Don’t Let Dishonest Employees Hurt Your Business and Their Peers Most employees are good, honest people. Take steps to protect them and your business by being vigilant and implementing proven theft-prevention measures. You can also shield your business from the financial repercussions of employee theft by purchasing appropriate business insurance like a business owners policy (or BOP) or a commercial crime policy. Policies can include what is called employee dishonesty coverage or employee theft coverage. This type of insurance is typically very affordable and covers specified types of illegal activity by your employees. ============= Rakesh Gupta is chief operating officer atbiBERK, part of Warren Buffett’s Berkshire Hathaway company. biBERK specializes in commercial insurance for small businesses. In his role, Gupta focuses on simplifying the insurance buying experience using technology and process innovations that make it easier for small business owners to get the coverage they need. How can you prevent cash theft?Implementing strong internal controls can help you deter and detect cash skimming.. Give Customers a Reward for Not Receiving a Receipt. ... . Raise Wages. ... . Use Strict Inventory Controls. ... . Don't Let Cashiers Be Accountants. ... . Monitor for Unusual Transactions.. How can you prevent cash skimming?The only sure-fire way to prevent skimming is to eliminate cash coming into your office.. Eliminate cash coming into your office. ... . Accepting ACH, EFT, and credit card payments is a much safer option.. Separation of duties is key. ... . Posting to accounts receivable and receiving cash receipts should also be segregated.. Which is the most effective solution to reduce employee theft?10 steps to help prevent employee theft. Practice proper bookkeeping. ... . Monitor retail transactions. ... . Track inventory closely. ... . Count-in, count-out cash. ... . Review all petty cash. ... . Actively participate in the business. ... . Offer meals and discounts to deter theft and boost morale. ... . Watch and listen.. |