ACM Investigations LLC

Building and maintaining a business goes much further than having the right idea, a good amount of savings, and enough skills to provide services. Regardless of the size of a business, the relationship that is maintained between a business owner or boss and employees could be the key to preventing employee fraud and theft, which is one of the biggest issues that businesses all over the world have had to face since the beginning of time. Unfortunately, being a good boss is not always the answer to preventing employee fraud, as one cannot control others’ actions, making it imperial to explore all possible paths that would prevent financial wrongdoing by an employee.

But before going in-depth about prevention, it’s important to be aware of the types of employee fraud that you can fall victim to so that you know what signs to look for in your employees.

Types of Employee Fraud

Further than stealing from business funds, employee fraud comes in different shapes and sizes. Some employees are more likely to commit certain types of fraud according to their work-related responsibilities, position, and access to finances and other important data.

  1. Larceny

    Larceny is the act of stealing from a business. This is the most common type of fraud that is committed in a business where cash is moved constantly, such as in a restaurant, fast food business or beauty salon, as cash can easily be concealed or taken when there are no supervising eyes around.

  2. Defalcation or Skimming

    Not to be confused with credit card skimming, skimming, formally known by the legal term defalcation, is a type of white-collar crime, where a person reports a lower total amount of earnings a business has by “taking cash off the top” of daily payment receipts.

  3. Fraudulent Disbursements

    Fraudulent disbursements are the act of an employee making payments for inappropriate purposes; this is the most common type of asset misappropriation.

  4. Embezzlement

    Another form of asset misappropriation is embezzlement, which is the act of withholding or appropriating assets that were legally entrusted to an individual, for their own benefit or ownership.

  5. Stealing Business Confidential Information

    With employees having so much access to a business’ daily operations and crucial client or customer information, employees could take advantage of their position to steal important data that could help them start their own business endeavors by stealing from your repertoire.

Enforce Astute Supervision

While having a friendly work environment for your employees is paramount, it’s also important to establish authority and ensure that you always show that you are invested in supervising all daily operations going on in your business.

When an employee knows that you are well-informed and that their everyday work activities are being carefully monitored, employees will automatically be more conscientious to not steal or embark on different types of wrongdoing. Good supervision is the main factor that contributes to preventing employee fraud and theft, as, without it, employees feel they have more liberty of acting without the fear of getting caught.

Although monitoring employees may seem like a bit of a leap when you haven’t had any past negative experiences with employee theft, it’s important to not forget that employee monitoring is just a natural part of employee responsibilities. Doing this will help to provide you with an essential layer of protection when it comes to being informed about business activities, and it will also help to establish an authoritative tone within your business. Never be afraid of enforcing that which is a natural work responsibility.

Employing the Right People and the Right Attitude

It’s highly possible that at one point or another you may unknowingly hire a person who is not transparent about their intentions towards you and your business. As it can be difficult to judge a person’s true intentions when you hardly know them, it’s necessary to have a hiring filter that will make prospective employees understand that there is a level of supervision happening in your business and that you will only hire those who not only show the necessary set of skills to work for you but that they also evoke trustworthiness.

Some of these filters can include running a background check, setting up a two-interview hiring process, and hiring employees on a learning-curve trial period to see if that person is really suitable to become a part of your team. Adding these steps to the hiring process will give out a tone of seriousness that will help to scare away any prospects who may be willing to ‘test the waters’ about the type of employer you might be.

Besides ensuring that you work with the right people, you have to maintain your stance as an employer when any financial mishaps or misunderstandings happen in the workplace. As this is a delicate matter, it’s important that while you do want to show understanding about how the situation could be nothing more than a mistake, you also want to evoke authority and display how you’re willing to dig deep into a situation to have it sorted. This will allow your employees to understand that you will go the extra mile to see if any wrongdoing was involved in any situation.

Don’t just brush off any instances when minor incidents occur in the workplace, even if you already know it was all a mistake or a misunderstanding. Instead, take the opportunity to educate employees on how to avoid the same mistake in the future. Education will allow employees to see how all issues have consequences, whether it was a simple mishap or intentional wrongdoing, your team will understand that they must be careful with their daily financial operations, data handling, and other procedures, which will in place result in less possible incidents.

Third-Party Business Activity Check

Although careful internal supervision is necessary and helpful to mitigate chances of business theft and fraud, your employees could quickly learn your habits and figure out ways of getting around your supervision. To avoid this, you could employ a third-party business supervision service, such as the Small Business Activity Check service offered by ACM Investigations LLC.

This service consists of a monthly visit by one of ACM Investigation’s most qualified trained investigators, where ACM will run a quality check that will be reflected in a thorough report. The report will grade an establishment on a scale of 20 to 40 points, which will be awarded according to cleanliness, staff service, checkout procedures, among others.

To learn more about employee fraud and theft prevention, along with other of the services offered for small businesses by ACM investigations LLC, please fill the form below today. 

Employee Fraud & Theft - Free Consultation Form.

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    These folks are exceptional in the quality of work they provide, they were quick to help with our investigation of a suspect we're trying to locate. Very professional, highly recommended for your PI needs!