How Expensive Can Be Employee Theft For Your Small Business?

8 min read

How Expensive Can Be Employee Theft For Your Small Business: According to the 2015 statistics, employee-related theft cases are a major challenge for all businesses – small or large. This fact is supported by the US Chamber of commerce which stated that 75% of workers of employees have the tendency to commit at least one in their overall working life. Half of these cases will typically steal from their employers repeatedly – and this cases, unfortunately, will never be discovered by the employers.

Another useful data from ACFE (Association of Certified Fraud Examiners) concludes that the cost of employee theft is nearly at $300,000 – which is enough to destroy or devastate small business –so how can businesses prevent this major issue?

We all know that employees are one of the major units of a business success. They can be a great asset –but they can also be a real threat or problem. According to the data gathered by ACFE(Association of Certified Fraud Examiners), 45% of small business doesn’t recover from fraud-related losses like employee theft.

Here are some ways how an employee can steal from a business:

Inventory

The theft occurs during the restocking of the inventory. Employee theft could stash supplies or merchandise inside their bags or pockets when no one else is looking.

Cash

Of course, stealing money or cash is the most common cases of theft. It could be easy to falsify any business transaction by offering a higher price to a customer.

Data

Stealing data is one way to exploit your business strategies with other competitors. This crucial data may include digital assets, proprietary information, or customer records.

Useful tips to protect your business

With all of those ways, how can a small business detect and prevent employee theft from happening?

According to statisticians, employees in the US steal for up to $50 billion each year, 7% annual revenue loss due to business fraud or theft, and 33% of bankruptcies of business is majorly caused by employee theft. With all of these scary figures, you can still protect your business from these issues to minimize embezzlement or employee theft.

Here is some useful tip to protect and manage your small business against these challenges:

Restrictions

As a business owner, you need to ensure that all the data from any transactions are protected and accurate. One effective way to act to safeguard your property is by restricting access keys to inventory, data, and information stored on your computer, merchandise, and supplies. You can do this by creating passwords and frequently change them.

Written procedures

Each of your employees should know the reason why they’re doing their job. To protect your business from any major issues like employee theft, try to create an effective atmosphere to help you keep track of all the transaction in your business. For example, numbering all the forms and documents that are used for any transactions and giving it to the trustworthy person.

Bank robbery

Inventory tracking

As mentioned earlier, one of the most common cases of employee theft happens during the inventory processes. It could be office supplies or business selling products, no matter what type of inventory it is, it is important for you to keep them all tracked and monitored. From its numbers and availability.

Dividing employee’s duty

Business owners should be more concerned about the employees in the merchandise or inventory areas and bookkeeping area. Dividing their tasks is one way to ensure your business is protected. For example, bookkeepers should not be the one to pay bills on the bank, or merchandise employee should not the one to decide for faulty items.

Seek professional help

Of course, it could be difficult to point fingers when it comes to these cases, which is why it could be beneficial for your business to hire a professional private investigator to help you monitor the employee’s background and other legal requirements.

Conclusion:

If any of these issues happen in your business, you need to immediately take action in order to mitigate any further damage and prevent any financial or productivity losses. For example, if you suspected an employee to steal something from your business, it could be from inventory, cash, or data, you need to quickly contact your insurance company right away.

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