Embezzlement happens every day, in every corner of the earth. It happens, as expected, to large corporation and the government. But as the above headlines show, it is also the plague of small business.
Webster Dictionary defines the word Embezzle as: "To take (money, for example) for one's own use in violation of a trust".
Business owners often trust employees and friends with their goods and money. Most don't even think about the possibility of theft. If you find yourself in this rose-colored-glasses position, this is your wake up call. Just because you have full faith and trust in your employees you still need to check up on them every once in a while. This is only way you can make sure everything is going as planned.
Embezzlement is a fast growing crime all over the world. Every day, each employee arrives at the office door with his/her own private set of pains and sorrows. Some lessen that grief by taking and using what doesn't belong to them. Why? Simply stated--because they can. Management makes it so easy and the temptation becomes too difficult to resist.
Being disorganized makes you a target for crime. Here are some signs that might signify your employees are up to some funny business.
- Employees refusing to take vacations and refusing promotions.
- Bounced business checks when you know the funds should be there.
- Unusual write-offs being attributed to bad debt.
- You know in your heart that something is wrong but you can't put your finger on what it is.
- Things aren't getting done or just aren't adding up.
I have been in the office organization business for 10 years and have witnessed some very sad betrayals. I have seen best friends go to work for best friends. I call this is the "TAG YOUR IT" syndrome. So often, best friend number 2 is in some sort of financial trouble. Because there is a high trust factor, it is way too easy for this person to begin the rapid slide into embezzlement. Unfortunately, after the incidents occur, best friends quickly become worst enemies. Often, they end up facing each other in court.
It is your responsibility as a business owner to safeguard and protect everything you have worked so hard to create. This means never trusting anyone or anything 100%. You must guard your bank statements, payables, receivables, payroll, inventory, supplies, equipment and above all else-your integrity.
There are safe guards you can put in place to protect valuable assets. Ask yourself this question, "Why in the world would I go out and borrow money, cash out my life insurance policies, risk all the equity on my home, retirement fund and other savings accounts, just to let someone take it all away?"
The best thing you could do for yourself and your company is get organized and stay in full control:
Ask yourself the following questions.
- Do I know my daily checking account balance?
- Do I require my bank statements and credit card statements to be reconciled immediately upon their arrivals?
- Do I require financial reports upon reconciliation?
- Do I verify that my cancelled checks and cancelled deposits match my bank statements?
- Do I know how much money I owe and to whom?
- Do I know how much money others owe me? Do I know how long it has been owed?
- Do I scan my paid bills to make sure I'm not over paying or double paying?
- Do I scan my paid invoices to see if they are actually paid and the cash has been deposited?
- Do I regularly check time cards and leave records? Do I use a time clock or written time sheets? Do I verify these records?
- Do I have a scheduled time to do inventory of supplies, equipment, finished goods, inventoried for-sale items, raw goods, work in progress? Do I conduct spot check inventories unannounced?
- Do I pick up my own mail before dispersing it? Do I know what kind of mail is coming in and going out of the office? Do I know that the mail tells me what my business has done, or not done?
- Do I personally take cash deposits to the bank? Do I match the deposit slips to the bank issued Deposit Register?
- Do I only allow only myself to sign checks?
There are steps you can take to insure the protection of your assets. They don't take much time, but they do require committment on your part. To get started, roll up your shirtsleeves and get ready to Stop Embezzlement Before Embezzlement Stops You. Order our step-by-step plan here.
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