How to Protect Your Small Business From Embezzlement
Embezzlement occurs in all kinds of businesses, even schools, and the people who do it might surprise you. For example, today the Associated Press reports that a Vermont school principal has been arrested for embezzlement, and local police say they found items in his home that were purchased using school funds.
People steal from all kinds of businesses, even (and sometimes especially) if they hold positions of authority and responsibility, and they do it in a wide range of ways. There is no absolute protection from embezzlement for your business but you can pay attention to some things that will certainly help to prevent it. Here are tips suggested by Entrepreneur that will get you on the right track.
Three Protection Tips
Putting proper controls in place is the first and most important step to embezzlement and fraud prevention. Lay down the right foundation and you should be able to avoid trouble or spot it as it arises.
- Cash business considerations: If you do any cash business, you must develop a habit of keeping money locked up at all times and making nightly deposits. Even the most ethical employee will be tempted to peel a bill off of a huge stack of cash lying around. Do yourself and your workers a favor and make it clear that money gets counted and deposited promptly and will be noticed if it disappears.
- Sign the checks yourself: If you're very busy you don't have time to sign every check for every expense that your business has. Or do you? Whatever you do, avoid using a signature stamp on your checks, because that just makes it too easy to sign your name. Designate a very limited number of employees who are authorized to write checks and train all of them on the whole process. People who are responsible for your money will start to notice if it's going missing or the process isn't being followed by colleagues.
- Work on your worker relations: Bosses often incorrectly assume that all's well because workers don't complain. But don't fool yourself or your workers will make a fool of you. Talk to the people who work for you, check in, and do listen when they express concerns. If they're handling your business, you should be interested in them. They will in turn become more interested in ensuring that your business thrives. Bonding makes for better working relationships and prevents criminality. People don't steal from someone they respect and who treats them well.
Talk to a Lawyer
If you're concerned about potential embezzlement or would just like guidance on putting together the best protections possible for your business, speak to a lawyer. You don't have to know it all or go it alone. Get help.