When your company grows to the point of needing employees (other than you) it can be scary. There are so many unknowns that come with hiring on employees that you do not know personally. The possibility exists that you could hire someone who will do a poor job or even intentionally do harm to your business through employee fraud. The first way to guard against these issues is to be very diligent throughout the hiring process. After that, there are some safeguards you can put in place that will allow you to quickly catch employee fraud.
- Keep detailed accounting records
The first step to take toward identifying employee fraud is to start keeping detailed accounting records. If your records are detailed and kept up to date it will make the process of identifying discrepancies much easier. Do not allow there to be vague information in your accounting records because this makes it easier for would be thieves to perpetuate employee fraud. For example, if you allow employees to use a company credit card or write off other expenses you need to require a detailed description of the expenses so you do not end up reimbursing employees for personal items. Other ways your employees can defraud a company include embezzling money and stealing time by getting paid for work that was not done. It is unfortunate that employee fraud occurs but it is a reality that you must protect your company against. If you do not have the time or ability to keep up with all of the accounting details you need to hire an accounting professional to help you with the process.
- Look over your financial reports on a regular basis
Keeping detailed accounting records is an important part of detecting employee fraud, but it is only half of the equation. You must also regularly look at your detailed financial information in order to catch any discrepancies. You can do this by regularly generating and examining reports that include information about accounts receivable, accounts payable, profit and loss, among others. You can have your accountant run these reports on a schedule that allows you to keep a close eye on the money that is coming in and going out of your business.
- Get outside help with your accounting
Sometimes a second set of eyes is exactly what you need to see a problem that has been in front of you all along. Outsourcing your accounting needs will allow you to have someone outside of your company familiar with the financial details of the business. You can work with an accountant or virtual accounting firm to help you catch any discrepancies. Some of the things an accountant can do are help you reconcile your accounts, manage expense reporting, and keep track of accounts receivable and payable. When you outsource your accounting help you will have someone who can look at your finances without the bias of knowing all of your employees personally.
It is impossible for you to run your business without having a certain level of trust in your employees. There is no need to be so paranoid about employee fraud that you allow it to get in the way of actual work getting done. Put the necessary safeguards in place and focus your energy on the tasks that you can do to help your business grow and thrive.