Determining employee fraud can be difficult and certainly intimidating for business entrepreneurs and small business owners. When it comes to preventing theft, stealing, robbery, shoplifting, and embezzlement, all under the umbrella of fraud, employers need to develop a sensible plan and execution strategy to protect their business from potential internal and external threats.
According to studies, employees can change the entire fate of the company they are working for by remaining true and honest with their profession. However, those who intend to steal from you must be held accountable for fraudulent behavior. A precedent for the company must be set, which will help prevent future theft and fraud.
Due to employee theft and fraud, businesses lose about $70 billion in annual revenues and profits in the US alone. This indicates that employee theft is inevitable. However, businesses can minimize potential threats by devising theft prevention techniques and implementing systems that will help them counter impending threats, either internally or externally.
Employees who intend to steal from you find sneaky ways to cheat or steal and take advantage of the organization’s loopholes. They know the company’s processes and systems to manage its business affairs well.
It’s Never Easy to Find the Right Person Involved in Fraud
Small business owners counter many problems regarding employee theft and fraud throughout their business journey. Business owners must play a predominant role in minimizing theft threats and dangers that may hurt their business’s integrity and long-term operations. However, catching those involved in theft or other fraudulent activities is no easy feat.
Why Employee Theft Happens
There are numerous reasons why employee theft and fraud may happen. It may occur due to personal reasons like gambling, maturing debt, emergencies, personal issues with the company’s owners, or the opportunity. Besides going into the details of employee theft and what makes someone steal from a company, we will briefly explain it with the 10-10-80 rule.
It states that 10% of employees would never steal from a company, 10% would take any opportunity, and 80% would access the opportunity by examining their needs and determining whether or not they should commit the act. This 80% is what companies need to prevent from happening through effective preventive measures and techniques.
What to Do When You Discover Employee Theft or Fraud
Small businesses are often reluctant to involve the police when discovering employee theft or embezzlement. When you catch an employee stealing from your company, there are four choices to make. You can follow disciplinary procedures, fire your employee, call the police for criminal offenses and proceedings, call your attorney, or call your insurance agent.
Disciplinary Procedures
If you have evidence of employee fraud, you can take the actions stated in your disciplinary procedures. You can recover your losses by asking them to return what they stole or compensate the company so that legal procedures are not pursued, which may result in jail time. Once you recover your losses, you can fire the culprit or not—as appropriate.
Call Your Attorney
You can also call your attorney for proper legal proceedings against the culprit. They may help you file a lawsuit against the perpetrator. Also, they may help you find and hire a forensic accountant who will review and investigate your bookkeeping and accounting records to file a strong claim against the perpetrator.
Call the Police
Once you’re done working with your attorney, calling the police to report employee theft or fraud seems appropriate. However, having the police show up at your business may disrupt your operations, which means additional disruptions, such as taking statements from coworkers and employees. You must be very careful to make the right choices for the fate of your company.
Call Your Insurance Agent
Remember to call your insurance company to recover your losses if your business is insured against employee theft or fraud. If you have been paying the insurance fees, you deserve the right to recover your losses.
Conclusion
In conclusion, addressing employee fraud demands a proactive approach from employers. Developing a robust plan to prevent theft and fraud is crucial for safeguarding business integrity. Despite challenges in identifying culprits, business owners must take decisive actions. Understanding the motivations behind employee theft and implementing preventive measures can help businesses minimize risks. When discovering fraud, options include disciplinary procedures, legal actions with an attorney, involving the police, or contacting insurance agents. Each choice requires careful consideration to protect the company’s interests and ensure a fair resolution.
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