Protect your business from the financial and emotional costs of employee fraud.
While good employees can be your business’s biggest asset, a bad employee can be a huge liability. An estimated 64% of small businesses have faced employee fraud with median losses at around $145,000. As a business owner, it’s vital that you do your best to safeguard your business against every threat. So, learn more about employee fraud and find out how you can take steps to protect your business from it.
The three most common types of employee fraud are asset misappropriation, corruption, and financial statement fraud. Asset misappropriation is the most common type of fraud because any employee at any level of your business can misuse company resources. Common examples of this type of fraud include forging checks, stealing from your business, and using company vehicles for personal use. Corruption occurs when an employee accepts bribes from vendors in exchange for buying their goods. This also occurs when employees offer unauthorized discounts in exchange for payoffs. Finally, financial statement fraud is usually committed by employees that handle the company’s finances. This occurs when they record fake revenues, inflate assets, and hide expenses.
One way to protect your business from fraud is to take more careful screening measures when you hire a new employee. Conduct a thorough background check and make sure you actually follow up on with their references. Doing a little sleuthing could uncover undisclosed criminal activity or previous involvement with fraud. Another way to protect your business is by checking your employees’ work. Don’t necessarily micromanage your team, just conduct surprise spot checks from time to time. This could uncover any fraudulent activities. Finally, you can reduce your business’s risk for fraud by having a code of ethics for your business. By emphasizing fairness and legality and encouraging employees to speak up if they notice any wrongdoing, you can deter employees from getting involved with fraud.
If you are a business owner, then try out these suggestions to keep your business safe from employee fraud. Remember, another great way to protect your business is by having the right insurance coverage for your needs. To find the best policies for you, trust the experts at Udell Family Insurance. Our dedicated team is ready to assist you with all your insurance needs. Contact us to get started today.