Complacency
It’s not your customers you need to be afraid of stealing off you, it’s your employees. Those that you trust the most could potentially be ripping you off.
According to the Association of Certified Fraud Examiners (2012), detected thefts committed by a person in a management role happens 37% of the time. The average length of time before a theft is detected is 2 years, and the median amount stolen is $175,000. Pure luck in stumbling across theft happens in nearly 20% of cases. And the annual revenues lost to fraud is 7%.
Having good systems in every part of your business is essential, but more critical around the financial numbers, not only to minimise loss but also to provide certainty for your employees, if they know there are strong controls and monitoring in place it gives them confidence to handle accounts and cash.
Here are 7 easy steps to minimise loss:
- If you are handling cash, 3 reconciliations are a must.
- Implementing a monthly check on all creditor payments (people you owe). Use an exception report that records abnormal activity in accounts.
- Monitoring and reconciling of all credit notes with strict management controls in place.
- Checks on all wage payments, looking out for fictitious names with real amounts often being paid into the same account.
- Undertake random stock takes on inventory especially high value items.
- Watch for people who will only deal with one cashier that could be a red flag to indicate discounting for friends or having mate’s rates which puts 2 businesses at risk.
- That person who is so “loyal” as to not take holidays may be covering up an intricate web of fraud that could be unravelled in their absence.
- Take an active interest in all facets of the day to day financials in your business - it may pay dividends.
