Employee theft is one of the biggest problems facing
small business owners in Nigeria and beyond. Daily, on the account of business theft, we see various businesses close up. This is among the top three reasons why many businesses do not survive into their third year. There are several ways employee theft takes place, they include:
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- Stealing (outright theft).
- Skimming (diverting business funds).
- Fraudulent disbursements (billing schemes, inflated expense reports, check tampering).
- Embezzlement of raw materials or merchandise.
- Stealing business opportunities (misappropriation of customer lists or other trade secrets).
With the abovementioned types of employee theft, insurance companies have found recurring and increasing theft alarming and have asked small businesses to put into place defensive mechanisms that will prevent employee theft. Below are our top six ways to protect against employee theft.
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Carry Out Background Checks On Each Of Your Employees
Before employing anyone in your company, ensure you do underground research on your potential employee. Employ someone whose biodata is sufficient enough. This includes their residential addresses, identity documentation such as national identity number, driving license; academic and work history, family record and so on. Any suspicious or unethical records, such as academic expulsion, criminal records, and other strange and unpalatable history are red flags.
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Watch Out For Suspicious Movements
As an employer, you must have an eagle eye for suspicious movement within the company. Studies have shown that where supervision is lax, employee theft exists in a higher proportion. These are the things to watch out for: first, when an employee lives above his salary levels; second, strong objections to structural changes to inventory, financial, and supply procedures; third, chronic gambling, and then missing goods, occasional deviation and deliberate flaunting from origin scheme of operations, drug and alcohol abuse, persistent borrowing, and occasional customers’ complaints of suspicion.
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Use Automated Purchase Orders
Using automated purchases in your business can prevent employee theft. Sometimes, you can employ building a payment app where customers can directly pay into a centralised bank account, which is under your control. Also, when you stock your business, know how much you’re expecting from it. You can seal every with a price tag, and input all goods in your shop in an Excel spreadsheet database. Let payment methods be generated from a computerized system where every data is easily accessed. As people get goods, it’s documented.
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Control Cash Receipts
In avoiding employee theft, it’s advised that you have control of cash receipts by serially numbering each slip and conducting weekly audits. For every sale that is made, the number of each slip should be written in a logbook for accountability purposes
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Create A Check And Balance System
Organise your company in such a way that the sales and accounting departments are different. The sales department should ensure that the accounting department accounts for every good and income of the business. In each department, let there be more than an individual to avoid ease of financial manipulation.
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Carry Out Unannounced Auditing Occasionally
Carrying out unannounced auditing of business sales can always keep employees on their toes. You can always do it every week, or month, when they least expect. But it must not be done in-between long intervals.
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This article was first published on 3rd November 2021
nnaemeka-emmanuel
Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.
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