Stop the stealing – Tips for preventing workplace theft

Whether it’s through cash embezzlement, false vendor payments or a lapping AR scheme, theft in the workplace is ever-present. When reading up on the topic, we found some alarming numbers that sadly aren’t surprising: more than 60 percent of workplace fraud is committed by managers or senior-level staffers, and 33 percent of fraud is committed by people with more than 10 years tenure.  

What’s even more shocking is that the fraud is happening right under our noses — in part because we have so much on our plate already, and also because no one wants to jump to conclusions when some of our numbers seem a little bit off. While we’re certainly not advocating for creating a culture of paranoia, we recommend implementing the following policies to help reduce your risk of fraud exposure:

1. Make vacation a must. Many folks who commit fraud do not take vacation, let alone two or three consecutive days off. It makes sense — they need to be present to catch the paper flow. Now, we are not suggesting that your hardworking employees who are so gung-ho about a project that they work through the holidays are actually secretly embezzling funds from your company account. But you can proactively protect your business by implementing a mandatory vacation policy.

2. Mandatory pre-employment background checks. Personal finance issues will tempt someone to steal from you, and pre-employment background checks can help you identify any red flags. Be careful hiring someone who sets off those flags, especially if they will be working in the accounting department or will otherwise have any opportunities to spend company funds.  

3. Check references. Always call references before you hire someone. A previous employer may let you know if a candidate you’re considering has burned them before — or they may hint at it in a way that you get the message.  

4. Be the first set of eyes. Review your bank statements before anybody else — either have them mailed to your house or make sure they stay unopened on your desk until you can review them (this could mean no online bank access for your staff). Then ask to see the bank reconciliation in a timely manner after you turn over the statement — and take note of what it says.

5. Maintain physical control of your blank checks. Release them upon request only.

6. Don’t be afraid to audit.

7. Consider an open workspace. It makes any funny business that’s going on that much harder to hide.

8. Keep the work at work. Do not let bank account information (either your company’s or your clients’) leave the office, and carefully consider any employee requests to work from home or take work home with them at night.

9. Encourage cross training. Rotate responsibilities and roles. For example, have multiple people share payroll responsibilities.

10. Open the mail yourself. Grab it straight from the postman – you never know what might show up.

There are many other internal controls you could put in place and just as many ways to check in on your financials. You also might want to consider bringing someone in to keep an eye on things on a weekly, monthly or quarterly basis. Whether employees resist or accept this person could be a telltale indication that something is up.

However you choose to move toward increasing your protection from fraud, we know you’ve got enough work to do. At the very least, start with the perception of detection and ensure your employees know that you’re monitoring all systems.