Safeguarding Your Business Against Employee Fraud

Here’s what you should know about employee fraud.

Unfortunately, around 64 percent of small businesses experience employee fraud. If you are a business owner, you may like to think that no employee would actively work against all you have built. The reality is that employee theft and fraud are possible in any business. Take a look at a few of our tips on how to safeguard your property against employee fraud.

Separate cash handlers. Be sure that the person who accepts the cash is not the same person who records the transaction in the books. If this duty is currently a one-person job, split the role up between two or three people.

Separate financial reporting. The person who prepares your financial reports should not be the same person who is responsible for entering the daily data in your books. If a business doesn’t have an accountant on staff, it is wise to use an outside accountant to enter data and prepare the financial report.

Screen new hires. When you are hiring a new employee, make sure that you conduct a thorough background check. Always check their references and track down previous employers, if possible. You may find undisclosed criminal activity or involvement in fraudulent activities.

Hold unscheduled inspections. Keep your business safe by conducting surprise inventory inspections or random spot checks of the company’s books. You don’t have to micro-manage your employees, but keeping an eye on them could reveal surprising information.

Establish a Code of Ethics. Create a Code of Ethics for your business that all employees must read and agree to in order to deter fraudulent activity.  Emphasizing fair and legal business practices and encouraging your employees to speak up if they notice any issues will help keep your business fraud-free.

Try out these suggestions to safeguard your business against employee fraud. When you’re looking for more ways on how to keep your company safe, make sure you have the right commercial insurance to fit your needs. For your insurance needs in Mifflintown, Millersburg, Lewistown, and surrounding cities in Pennsylvania, contact the professionals at Sausman Insurance Agency today.