Are you a business owner, or is your family or friend a business owner? If so, this information could save hundreds, if not thousands, of dollars in lost money from theft.

Here are “10 Ways Someone Can Steal From Your Business” and a few tips on how to protect yourself:

1. Stolen Checks

• Keep your checks locked up and only accessible to the check writer and check signers.
• Keep track of your check numbers and file your cancelled checks in numerical order (including voided checks) If you no longer recieve cancelled checks and only have copies on the bank statements, you still need to keep voided checks, in numerical order.  Do not destroy them.
• Review your bank statement monthly for fraudulent/suspicious transactions.

2. Paying Personal Bills with Company funds

• Implement a policy that includes writing the account number of the bill being paid on the memo line of the check.  Verify the account number is for the business account.
• Verify the amount of the check matches the amount of the bill
• Verify the Payee name on the check matches the bill being paid.
• Make sure you are provided with the backup to all checks that you sign so you can verify the above.

3. Credit Card Fraud

• Keep a log of all credit card numbers and  the employees to which they are assigned.
• Make sure that all persons with a company credit card submit their receipts to accounting.
• Match all receipts to the credit card statements each month.
• Review any transactions that do not have a matching receipt.

4. Stolen Receivable checks

• Have the person who opens the mail endorse the checks immediately.
• Review your Accounts Receivable on a monthly basis.  Look for any past due invoices and implement collection procedures immediately.
• Review all credit memos and voided invoices and confirm their validity.

5. Pocketing cash from cash sales

• Balance transactions on a daily basis and compare sales receipts to funds received.
• Evidence that all cash proceeds received a handwritten, uniquely, and sequentially, numbered receipt.
• Make sure cash handling and record keeping duties and responsibilities are divided among staff.
• Review voided transactions.
• Review deposits to determine that funds were deposited as required and amounts were posted to the proper General Ledger account.

6. Forgery

• Personally open the envelope with your bank statement each month.  Thumb through the checks (or review the check copies) and verify that the signatures match the  authorized signers and are not forged signatures.
• Look for check numbers that are out of sync.
• Look for unknown Payees and an unusual amount of payments to the same payee in the same month.
• Submit the bank statements to your bookkeeper/accountant for reconciliation only after you have reviewed them.

7. Ghost Employees

• Know all your employees by name and by face.
• Review the list of employee names on your payroll regularly.
• If using an outside payroll agency, be the one to open the payroll package from the agency and look at all the checks to be distributed, making sure you recognize the names and that there are no unauthorized duplicate checks.
• If using an in-house payroll system, compare the checks to the list of employees and again, know who your employees are.
• Be aware of terminated employees and look for checks written in their name after their termination.

8. Office Supplies theft

• Keep your supplies in a locked cabinet or secured area.
• Implement a “Supply Request Voucher” system and keep track of supply orders.
• Designate one or two employees as custodian of supplies.
• Authorize supply requests.

9. Warehouse theft

• Make sure all employees are aware that management is taking steps to thwart dishonest personnel.  Such steps include setting up a system of loss prevention (devices and procedures), administering the system rigidly, and auditing it often to discourage dishonest employees who try to bypass the system.
  
• Never underestimate your ability to influence your employees in the direction of honesty and be aware of the example you are setting.   Your use of good controls, loss-prevention procedures, and cleverly located physical security devices are powerful reminders to employees that the boss does indeed care.
  
• There are so many ways that merchandise can be stolen by employees that the imagination is the limit.  Whatever the motivation, a fair percentage of workers succumb to temptation and steal. Prevention of theft requires simple but sophisticated systems for handling merchandise and currency, which not only deters, but leaves a trail of documents when any stealing takes place.  The most successful way to combat such theft is to prevent or discourage it.
  
  
• The following rules can help reduce pilferage:
  
  
  • Employees who are caught stealing will be prosecuted. 
  • Never assign two or more members of the same family to work in the same area.
  • Drivers will not be allowed behind the receiving fence.
  • At the loading platform, drivers will not be permitted to load their own trucks, especially by taking goods from stock.
  • Every lunchbox, tool box, bag, or package must be inspected by a supervisor or guard as employees leave the plant/facility.
  • All padlocks must be snapped shut on hasps when not in use to prevent the switching of locks.
  • Keys to padlocks must be controlled.  Never leave the key hanging on a nail near the lock where a crooked worker can "borrow" it and have a duplicate made while he or she is away from work.
  • Trash must not be allowed to accumulate in, or be picked up from, an area near storage sites of valuable materials or finished goods.
  • Inspect disposal locations and rubbish trucks at irregular intervals for the presence of salable items.
  • Control receiving reports and shipping orders by using numbers in sequence to prevent duplication or fraudulent payment of invoices and the padding or destruction of shipping orders.
  • Receiving reports must be prepared immediately upon receiving a shipment.

10.   Cheating on expense reports

The first step in effectively reducing instances of fraud can be accomplished by developing a policy. This policy should communicate:

• Management’s position on fraud.
• Management’s definition of fraud.
• A provision for making employees responsible for reporting fraud.
• A detailed description of the investigative and resolution process.
• Each expense report must be properly completed and documented.
  • For each expense report completed, support documentation of each expense must be attached. The support documentation must be the actual credit card receipt with invoice attached or the register receipt if the expense was paid with cash.
• The expense report must be signed by the employee.
• Completed expense reports must be approved.
• The supervisor reviewing the expense report should insure compliance with the following:
• Proper documentation.
• Reasonable expenses given the employee’s position.
• Signature of the employee submitting the expense report acknowledging Company policy.
• There is a written explanation In the event a receipt is lost.
• A clear statement of the business purpose of the trip and a copy of the meeting/conference agenda.