Who Steals From Their Employer? – Part 2

Make certain that your policies are made clear to all employees, let them know that theft is not tolerated and be consistent with your communication and follow up. Many companies will install business security camera systems along with a form of key card access systems to help identify who might have had access to a particular area. For instance, in a retail establishment the person that gets change should hand that to a second person at the front end that puts the money in the till and verifies the amounts. Or, in an office the person that writes the checks should not be the person that reconciles the bank statements. I conducted an investigation once where an office associate was shorting the deposit and taking the money for herself. The bank had her listed as their contact person in the event of a discrepancy, not the Manager or Owner. So, she politely took the bank’s call and told them that she would look into it. Her next step was to make journal entries to move the discrepancies into charge off accounts. It took almost two years for an auditor to take note of the cumulative amount of unusual discrepancies that totaled over $250,000. Third, have a quality surveillance system installed that provides clear images of your highest risk areas. Routinely utilize the system to inspect what you expect of your organization. This can aid in improving efficiencies, customer service as well as monitor for policy deviations and theft. Lastly, create a regular audit system, preferably conducted by an independent third party. Depending on your situation, an expertly installed door intercom video system will help restrict security to certain areas of your business. Remember that you have no control over the needs of your employees. Your most trusted person, your right arm may have been put in a personally overwhelming situation. One that he or she sees no way out of rather than to ‘borrow’ some assets to get by in the short term. Almost every major embezzlement case I have investigated started that way. The employee was torn between their loyalty to their employer, their morality and their responsibilities to their family. Guess what, family wins out every time. No matter how strong your relationship is. The employee honestly convinces themselves that they will put the money or merchandise or product back quickly. But, the reality is they do not have the means to do so. Once they get away with the theft, the second one is usually not far behind. Then, they tell themselves that just a few more and they can get even and then work on putting it all back. It is important to rely on professionals to help you setup a good process that is tailored to your business. You should expect them to evaluate your needs and design an entire Loss Prevention process that starts with screening, includes policies and procedures, a robust security system and an audit process. Do these things right and do them consistently and you will be well ahead of the curve in minimizing your exposure to losses and thus, protecting your profitability.