Employee theft in small businesses is not considered a concern because it goes undiscovered most of the time. On average, it takes two years for a company’s fraudulent activities to be revealed. According to statistics, three out of every four small business employees have stolen something from work at least once. Half of the employees who admitted to stealing from their firm acknowledged doing so more than once.
WHAT IS EMPLOYEE THEFT?
Employee theft is described as the unauthorized taking, use, or misuse of an employer’s assets. The term “employer’s assets” is significant since it implies that employee theft is not limited to cash. Employees can steal considerably more valuable assets from a corporation in many industries than money. Let’s discuss some of the most common assets that employees steal from their companies:
Money: The most common asset stolen from companies is money.
Time: When an employee is paid when he or she did not work, this is referred to as time. This frequently occurs when individuals falsify timekeeping records or are not working while on the job (although difficult to prove).
Supplies: Theft of office supplies (paper, pens, laptops, etc.) and restaurant supplies are typical examples of supply theft.
WHY DOES EMPLOYEE THEFT MATTER?
According to the latest reposrt of US Chamber of Commerce, 75 percent of all employees have stolen at least once, and half of these have stolen multiple times. According to the Chamber, employee theft is also said to be the cause of one out of every three business failures. Employee theft costs the retail industry in the United States $53.6 billion each year.
Take a look at these numbers from the American Society of Employers:
- Employee stealing costs businesses 20% of their revenue.
- An employer must wait an average of 18 months to detect a fraud plan.
- Managers account for 55% of the perpetrators.
- Sixty percent of businesses have employees who have been trained to deal with fraud and ethics issues.
METHODS OF EMPLOYEE THEFT
Employees use a variety of tactics to steal from their employers (from the company). When you think about employee theft, the first thing that comes to mind is a cashier stealing money from the register or a maintenance worker stealing stuff from around the office. Employees steal from the company in a variety of ways while this is going on. The most common types of employee theft, as reported by the National Federation of Independent Business (NFIB), are:
- Fraudulent Disbursements
- Stealing Business Opportunities
EMPLOYEE THEFT HAS THE POTENTIAL TO BRING YOUR COMPANY DOWN
Employee theft was found to be the cause of bankruptcy in 33 percent of small enterprises. It is very likely to occur in your small firm also. The average amount stolen from a corporation during an employee theft operation is $175,000. Despite these troubling statistics, just 1% of small business owners believe that employee theft is a Really a very serious problem affecting their company.
HOW TO PREVENT EMPLOYEE THEFT
- Use Careful Hiring Procedures:
Before any new hires start working, make sure they pass a background check and a drug test. Addicts are statistically more inclined to steal in order to support their addiction.
- Utilize a Surveillance System:
One of the most efficient ways to prevent theft and hold thieves accountable is to install a surveillance system.
- Create a system for employees to report and be rewarded:
Create a policy in an employee handbook that allows employees to report questionable conduct via text, email, or phone. Employees are far less inclined to steal if they are aware that others will report them.
- Make Friends with Your Co-workers
When an employee knows his or her boss, it’s more challenging to steal. There is less accountability when management is unfamiliar with their employees’ routines, schedules, or personalities.
Moreover, talk to the employees and make sure you know their names. This would prevent theft and boost employee morale and make them feel valued at work.
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