The thought that employee theft only happens at large businesses like the Wal-Marts of the world is a fallacy. Small businesses are actually more likely to be affected by employee fraud, and will also sustain a larger median loss than bigger companies.

The 2006 report by the Association of Certified Fraud Examiners showed that businesses with fewer than 100 employees suffered a median of $190,000 in fraud losses. Without safeguards, any business is susceptible to fraud, especially common forms like check tampering, fraudulent billing and stealing money before it’s recorded.

There are several steps to safeguarding your company

First and foremost…RUN AN EMPLOYEE BACKGROUND CHECK

Background checks not only provide background information on potential employees, it could also save the company a lawsuit if anything goes wrong.

SIGN YOUR OWN CHECKS

Sign your checks instead of using a signature stamp. This is especially important since 29 percent of fraud cases among small businesses involved check tampering.

PAIR A FRAUD HOTLINE WITH FRAUD AWARENESS

Offer an anonymous reporting system, and encourage employees to safeguard their own jobs. Employees must understand, if the company incurs a large loss then everyone may lose their job.

REVIEW COMPANY FINANCIAL RECORDS

Whether you are small or large, you should be aware of monthly revenues and expenses. If something does look right, or you can’t explain the changes, then there is a problem.

CONDUCT RANDOM AUDITS

Use an auditing strategy that looks not only for fraud, but also for warning signs. Conducting random audits allows to see small changes that could mean a potentially large change or loss if they notice that other small events go unnoticed.

HAVE A SEPARATE COMPANY CREDIT CARD FOR EACH EMPLOYEE

Providing separate cards will greatly minimize the risk of credit card abuse. It will allow you to see what each individual employee is charging, and then require documentation of purchase and its use for the company. If no documentation is handed in then have subsequent action to follow.

IMPLEMENT CHECKS AND BALANCES

No one employee should have total control over any one area in the company. You need to have checks and balances to ensure that abuse does not occur.

Theft will never be eliminated, but as a company you can take steps to deter it.