Small business owners, particularly in the early stages of their company, often neglect to protect their business from internal theft. Small businesses are just as at-risk for internal theft as larger companies. Here are some simple, efficient ways to prevent embezzlement and employee theft:
1. Divide functions. Don’t assign one employee to perform all tasks; but have different employees receive customer payments, make bank deposits, sign checks, etc… Institute your own system of checks and balances.
2. Be involved with bookkeeping. Meet regularly with whomever is in charge to look over the books. As a business owner, you need to be aware of the day-to-day functions of your company. Letting long periods of time go by without checking in makes you much more vulnerable.
3. Sign checks yourself. Don’t use a signature stamp.
4. Cross-train your employees. Train employees to perform multiple tasks. Mix up the system every so often. Enable employees to do audits on each others work. This has many benefits, but also minimizes the chance of theft.
5. Encourage trust. Shared power and responsibilities not only prevent theft, but increase trust between employees. A culture of paranoia isn’t going to help your business.
