Fraud Alert: Tips to Reduce the Risk of Employee Theft

Even if you do your due-diligence to ensure that you are hiring good employees, don’t be fooled into thinking that your business is immune to theft and fraud. As a business owner, it is important that you are taking a proactive approach to protect your assets and reduce the risk of theft in your organization.

Are You Encouraging Theft?

It might be hard to believe that one of your employees would steal from the company. But, theft happens every day. In some situations, business owners aren’t preventing fraud proactively. In other situations, business owners might be unknowingly encouraging their employees to steal from the company.

When you are missing regular checks and balances, then it leaves gaps in the system, often creating open doors of opportunity for people who are looking for an angle. If you don’t have adequate oversight in place, then you could be unintentionally encouraging people to take advantage of the system

How do these problems occur? Every business owner will adamantly argue that they aren’t leaving these doors of opportunity open. But, there are often small situations that are overlooked, where an employee can skim a little (or a lot!) of money from the company. For example, a cashier might see that an error in the cash reporting wasn’t noticed by management. Or, a person over accounts payable could create a fake vendor account if no one else is checking the transactions that are moving through.

Employees know when they are being monitored, so they will stay within the lines when management is watching. But, if people suspect that mistakes and small problems are slipping through undetected, then they might be tempted to take advantage of the situation.

Honest Employees Can be Tempted By Weak Points

One of the biggest mistakes that you can make is running a background check when you hire an employee… and then assuming that a clean record means that you can trust the person. It is possible that they have committed theft in the past, but they were never caught. Or, a seemingly honest person could be tempted by an easy opportunity that is presented in the workplace.

Obviously, most employers would be hesitant to hire hardened criminals. But, they never expect that a person without a criminal record might complete fraud. Whether the employee is driven by financial stress at home, or they want to pad their bank account, money can make people do unexpected things.

In some situations, the employee might be dealing with a stressful situation such as an unemployed spouse or unbearable medical bills. These stressful life situations can drive people to make choices that are out of character with their regular actions. Financial needs can challenge the morals of even the best people.

Reconciliations and Audits

It is a big mistake to have one person working on accounts without checks and balances in place. Regular reconciliations are important to reduce fraud so that that small errors can be detected as soon as possible. When employees know that reconciliations will be done, it reduces the risk that they will try to steal from the company. So, let employees know that management is always overseeing the work that is completed.

For example, you could have someone completing the bookkeeping tasks on a daily basis for your company. But, make sure that you also have an accounting team to reconcile the financial reports. These reconciliation activities should be completed on a regular schedule, such as once a month. It is also a good idea to have unannounced audits for routine checks of the financial accounts.

What types of audits or reconciliations should you be using? Your accounting team can make recommendations to match the needs of your company. These tasks might include:

  • Authorizing transactions
  • Counting cash
  • Reviewing transactions
  • Comparing account balances
  • Looking through financial documentation
  • Balancing the accounts and transactions
  • And more

It isn’t necessary to implement an elaborate reconciliation system that is difficult to manage. Instead, make sure that you have multiple people reviewing the information to identify potential discrepancies. These checks-and-balances can go a long way to help you avoid financial problems in the future.

When employees are informed that their work is going to be checked, then they will be more thorough in accurately completing their tasks.

Setting Up Security Systems in the Office

If you want to reduce the risk of theft, then the first step is to set up security systems that monitor the movement in the office. When employees know that they are being monitored, it will reduce the risk that someone will try to pull a stunt in front of the camera.

Physical security might seem like an expensive cost, but it is worth the effort if you can save thousands of dollars in fraud.

Compare the risk of these two companies:

  • Company A leaves the doors unlocked throughout the day, there is no security system in place, and financial information can be obtained Lapses in security create a situation where someone could steal financial details without being detected.
  • Company B has security cameras, badge-entry doors, and managers on-site to oversee daily activities. This situation reduces the opportunities for someone to make a move without it being recorded by management.

Entrances and rooms with sensitive information need to be under lock-and-key. You might consider a key card system that records the movement of employees in and out of the room. These details can help you know who is accessing the areas, pinpointing the source of the problem if anything occurs.

Digital Security

Technology can be a great tool for your business, but it can also open up a host of security issues if you aren’t careful. An employee with access to online financial accounts could make a few small changes that go undetected. Even if your employees are honest, you could be at risk of outside hackers who want to steal information from your company.

Be careful about managing the credentials for computer systems that hold sensitive information. Hire an experienced digital security team who can encrypt information as needed. If employees have access to these areas, then they need to lock their computer before walking away from their desk. These security measures can keep your online information protected so that you can avoid digital theft.

Taking Action When Something Happens

In the unlikely case that something goes wrong, it is essential that you respond quickly to stop the problem. Other employees will see that you dealt with the fraud right away, setting the tone so that people will know what to expect if they make the same mistakes.

Be clear about the company discipline guidelines, and don’t be shy to take action if fraud occurs. Even small instances need to be handled efficiently because these small things will likely lead to bigger issues in the future.

A clear-cut policy will communicate that you are serious about fraud prevention. Discipline is a way to show that you will follow-through with the policy as needed. If an employee is fired for fraud, then you should tell employees what happened and be clear about the punishment that was given. Be careful to protect information that can’t be shared because of laws in your area. For example, you might not have the liberty to share details of the case or the identity of the person who committed the fraud.

Consistency in the implementation of your fraud policy is important. Make sure that you are dealing with employees in the same way, without discrimination. For example, if two employees make the same mistake, then they should receive the same punishment. This fairness will show that the policy is implemented regardless of the extenuating circumstances.

Talk to an Accountant to Implement a Strong Financial System

The best way that you can prevent fraud is to ensure that you have an experienced accounting team overlooking the financial details of your company. An outsourced accounting service can offer third-party oversight, reducing the risk that an internal problem will go undetected.

A conversation with your accountant can be a valuable way for you to learn about the potential weak points in your accounting system. Then, you can make a few changes or adjustments as needed to fill in the gaps and prevent those issues from blowing up in the future. Prevention is the best approach to mitigate your risk and avoid a headache later on down the road.

Your business doesn’t need to be at risk for fraud! A few small changes in your financial systems can go a long way to keeping your business protected. If you haven’t already put a system in place to protect your business interests, then right now is a great time to talk to our team here at Easier Accounting. We will gladly evaluate your finances and make recommendations about the best ways that you can prevent internal and external fraud.

Contact us to learn more about all of the accounting services that we offer. We are here to help with anything that you need: (888) 620-0770

Millennial-Style Accounting: How to Modernize Your Business to Attract Millennials

As a forward-thinking business owner, you need to consider the ways that you can transform your systems to accommodate new trends in the industry. Many start-ups and small businesses are looking for ways to attract Millennials as employees and customers. So, there are a few things that you need to do to shape company culture so that you can increase the likelihood that you will be able to work with this generation.

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Whether you have a big local office or you are managing work-from-home employees, there are a few things that you can do to ensure that you are adopting a millennial mindset. Our team at Easier Accounting is working hard to stay ahead of the trends in the industry, and we will gladly help you transform your system accordingly. We specialize in small businesses and startups, so we have the hands-on experience that you need to ensure that your company is in line with the millennial mindset.

Here are a few tips to help you get started:

Get Rid of the Paper and Go Digital

Most people have a smartphone in their pocket, so there is no reason to fill the office with stacks of paperwork. If you are stuck in the system of only handing out paper checks, then you might cause a little irritation for millennials. This generation wants to work in a digital world, which means that they prefer automated solutions such as direct deposit.

If you are still distributing paper checks, then right now is a great time to choose a payroll processing system that allows for direct deposit. Not only will you improve the system for your employees, but you can also save a rainforest at the same time.

Flexibility of Options

Millennials don’t like to be tied into one pathway, so you need to make sure that you offer multiple options to cater to their needs. Consider the pricing structure of your products or services to see if you are offering the variety of choices that people prefer.

Putting together a solid business plan can be one of the best ways that you can improve the success of your company. Make sure that you talk to your accountant to be sure that you are designing a plan that will help you prepare for the future.

Tech Savvy Systems

Implementing a system for tech-savvy employees is a great way to show that your business is keeping up with the trends. Use a software program that keeps real-time data and information about the employee’s paycheck and benefits. This information can be valuable if an employee has questions about their withholding or payment.

The right cloud-based software can make it easy for you to run reports from any location. This information is always in sync with the accounting team, so that you never have to worry about lagged reporting. Additionally, a secure cloud-based accounting system can keep the information protected to reduce the risk of confidentiality breach due to prying eyes.

Consistency and Organization

You need to make sure that you are setting the right tone for your company with the right organization and consistency. These habits will influence the attitude of your employees and company culture. If paychecks are always sent on time without question, then your employees will feel the security that is needed to feel safe at work. Also, good organization helps to build trust in the company to improve overall company culture.

These practices are important for interactions with customers as well. When you are organized with an effective billing system, then your customers will pay the invoices and come back to buy from your company again in the future. They want to know that you are on top of everything, giving them confidence in your product or service. As you build the confidence of your customers and employee, it helps to boost the brand of your company at the same time.

Other Ways to Build Company Culture for Millennials

In addition to upgrading your accounting system to cater to millennial employees and customers, you also need to think about ways that you can strengthen your brand to show that you are leading the industry. Many people agree that millennials are focused on the details. The best way to set your company apart from the competition is to look for the small ways that you can create a lasting memory for each person.

Here are a few things that you can do in your office to boost the mood of your team each day:

  • Snacks and Treats: Millennials love free food, and you can build your company brand by having a snack area for everyone to enjoy. For example, have a cupboard with candy bars, mixed nuts, and fruit to curb the afternoon hunger when the cravings hit. Also, consider putting a candy jar on the front desk to welcome customers when they come into your office to visit.
  • Coffee and Drinks: Most people like to start their day with a cup of coffee, and you can help everyone feel at home in your office by offering free coffee. This expense is minimal compared to the long-lasting culture that you can create for your employees and customers. A coffee pot and a small fridge with soda and juice can be a great way to help millennials enjoy their experience with your company.
  • Catered Meals: A few snacks can go a long way to curb the cravings, but you can gain extra “brownie points” by catering meals for your employees. Pizza Fridays or take-out sandwiches can show extra gratitude for your team. This strategy can also be used to attract millennial customers. Offer free food at introductory meetings, and you will attract a bigger crowd.
  • Modern Décor: You only have about five seconds to create a lasting impression for each person who walks into your office, so make sure that you are setting the right impression. If people walk in to see shabby carpet and worn furniture, then they will have a bad impression about the services that you offer. Transform the appearance of your office, and you will boost the impression that people get when they walk through the door.
  • Online Presence: Whether you have a brick-and-mortar business or everything is run online, you need to make sure that you have a strong internet presence to build your company brand. A professionally designed website, social media profiles, and other online features can establish your company as a leader in the industry. People spend a lot of time online each day, and they will gain confidence in your business when they see that you have put effort into your online campaign. Look for an accounting system that can be integrated into your website to streamline transactions and make it easy for customers to buy your products.
  • Casual Clothing: If you want to attract millennial employees and customers, then it is time to ditch the suit and tie. For many years, companies held strict dress codes that required business casual every day of the week. Some companies relaxed their standards a little bit with casual Fridays. Now, forward-thinking companies aren’t worried about the dress code. Employees and customers can be comfortable in t-shirts and jeans. In fact, some companies have found that productivity goes up when they take a casual approach to dress code and other non-essential corporate rules.

Thinking Outside the Box

Millennials love the forward-thinking attitudes that are found in business owners who are looking outside the box. If you want to attract the millennial crowd as employees or customers, then you need to take a hard look at your company culture and the daily practices that are influencing your brand.

Just because the corporate culture has been unchanged for so many years, it doesn’t mean that you need to be stuck behind the times in these old habits. A few small changes can go a long way to transform your business and help you reach higher levels of success. Show your employees and customers that you are staying ahead in the industry, and you will naturally attract people who want to buy the products and services that you are offering.

A digital presence, automated systems, and modern accounting practices are essential to creating the foundation for your business. Make sure that you hire an entrepreneur-minded accounting team, like Easier Accounting. We know that things are changing, and our goal is to ensure that you are maximizing your influence in the industry. We will help you stay ahead of the financial tracking and automate your accounting in a cloud-based system to improve the experience for yourself, managers, employees, customers, and more.

Are you ready to learn more about how these accounting services can help you connect with the millennial demographic that you are targeting? Then right now is a great time to schedule a consultation with our team. Here at Easier Accounting, we have the experience that you need to take your success to the next level. Call us to see how our accounting services can make a difference for the future of your business. We are here to help with anything that you need: (888) 620-0770