Preventing Employee Theft at Your Agency

Employee theft costs businesses more than $120 billion a year and affects 95% of all companies in the U.S., according to American Databank.

Of small businesses, 64% are victims of employee theft, according to a University of Cincinnati survey. Is your agency next? Here are three steps you can take to make sure you’re protecting your agency’s assets against internal crime:

1) Safeguard time. Make sure your employees are working all the hours they say they are. Whether it’s on their computer or their smartphone, use a system where staff can log in, work their day, then log out in the end. For both salaried and hourly employees, this is a simple way to keep track of the days they work and what client or tasks they work on.

2) Safeguard money. Separate tasks as much as you can when working with incoming money. Make sure whoever is receiving payments is different from who is posting them into your accounting system and making deposits. Do some test runs of your own to check on your staff periodically and inquire about the daily cash deposit on occasion, even if you know it’s correct.

For money that goes out of your business, make sure you sign all checks or approve all payments before employees send them. Be similarly diligent when it comes to credit card refunds. You might consider including an additional level of approval before staff can process a refund—even just getting approval from a second employee will help deter misappropriations.

3) Safeguard inventory. Lock up important company inventory and equipment, and make sure only one person is responsible for it. Implement procedures for signing out inventory and disposing of outdated or obsolete inventory. Spot check as often as you can, especially the most expensive items if your time is limited. If your staff sees you do this and perceives that you are watching everything, they may think twice about engaging in dishonest activity.

Financial consultants Michele Johnson & Lorraine Kennedy are the authors of a new book, “Building a Stellar Business: A Structured Guide to Financial Success.”