Do you run your own company? if so then it will probably no doubt have crossed your mind that employee fraud could take place. Even smaller companies are not immune from employee fraud from the savviest of employees.
But how do you go about preventing employee fraud? And what are the tell-tell signs? How do you make sure that you are targeting actual criminals and not hanging an honest employee out to dry?
Here’s everything you need to know about how to prevent employee fraud.
Are Your Employees Acting Supsiously?
One of the key ways to detect employee fraud is to determine whether your employees are acting suspiciously. Several tell-tell signs could indicate they are committing fraud or their behavior certainly merits further investigation.
Do they regularly come to the office first thing in the morning? Are they always the first one there? This is unusual behavior for a junior or mid-level employee.
Be sure to ask them why and if they don’t offer a reasonable explanation it might set alarm bells ringing. You could ensure they are locked out of the building until their allocated start time and see what their reaction is.
Do they also like to take their work home with them? Don’t allow them to take files and folders or even work computers home with them without a reasonable explanation. If they don’t need to do continue their work from home on that particular day don’t let them take anything with them.
Employees Living Beyond Their Means
Employees living beyond their means might not always be on-the-take. Perhaps an employee has shares in other companies, inherited wealth, or other interests.
Maybe they are moonlighting in another career that is acceptable to the company – perhaps they’re an author or a singer-songwriter. But if this is the case you would expect them to be open and upfront about their other career not coy or shy about it.
If it’s unclear where their extra money is coming from and they suddenly show up in a fancy car or have visibly more expensive suits then you might well be suspicious.
The key question is whether they have been embezzling the company or making profits from selling insider information about the company.
Employee Who Obsessively Works Overtime
Don’t we all love those employees who volunteer to work overtime? We all like to hope that’s because they want the best for the company and want to work hard to boost profits for everyone.
Unfortunately, not everyone doing overtime is motivated by pure dedication to the company. Some employees work overtime because they are trying to gather inside information on the company and they don’t want to be disturbed.
If an employee is consistently volunteering for overtime then you need to consider why they are doing this? Ask them in detail to explain themselves. If they can’t give a good enough explanation then it might be time to investigate what they’re up to.
Ask another employee to do overtime instead or convince a trusted employee to sit beside them and try to keep tabs on what they are doing.
What’s Going On With Petty Cash
Thanks to the pandemic, cash is quickly going out of fashion. Most businesses now operate on a cashless model, doing all of their transactions online. But if you own a shop like a newsagent then you might still have a lot of cash on the premises.
Your employees are no doubt in charge of looking after the cash. This will always require a degree of trust. The reality with petty cash is that no accounting system is infallible and they may well be able to get away with stealing small amounts of money that go unnoticed.
But if your accounts are regularly out of sync with the amount of money in the cash register then you may have a serious problem on your hands.
You need to be doubly sure that money is going missing. Check, double-check, and triple-check your accounts over two accounting periods. Then hone in on a culprit. Once you have a suspect you need to catch them in the act.
Be sure to make sure all the tills are covered by CCTV.
Hiring a Private Investigator
Ultimately if you really want to catch and stop employee fraud then you are going to need the help of an expert. Try Flatirons Private Investigations who might be able to help you.
They will have a lot of sophisticated methods they can employ to ensure you find out who is responsible for the crime. The very nature of fraud is that it operates outside our line-of-sight so we might not even be aware it’s going on.
You can then use this evidence to confront the employee and potentially involve the police so that your business does not lose any more money or suffer reputational damage. Ensure all the employees involved receive personal therapy if they require it to deal with the trauma of one of their employees being found out.
Dealing With Employee Fraud: Be Thorough
If you want to deal with employee fraud then you need to be thorough in your investigations. Don’t make assumptions that could lead to you accusing the wrong employee: they could take action against you for unfair dismissal.
And if you can’t mount an investigation yourself be sure to hire a private detective to help you uncover and prevent employee fraud in the future.
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