• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Wealth Pilgrim

No Money Worries. No Matter What.

Neal Frankle featured in
  • Home
  • Life Insurance
  • Investing
    • Build Strong Investment Building Blocks To Avoid Going Broke In Retirement
    • Systematic Mutual Fund and ETF Investing
    • Stock Market Investing Guide
    • Choosing the Right Investment Brokerage Guide
    • How Bonds Work Guide
    • How Banks Really Work Guide
    • Annuities – What You Need To Know Before You Invest
    • A Beginners Guide To Buying Individual Stocks
    • Create A Pool Of Great Mutual Funds and ETFs To Pick From To Secure Your Retirement
    • ETF and Index Fund Investment Guide
  • Earn More
  • Banking
  • Retirement Planning
    • Retirement Guide
  • Ask Neal a Question
  • Reviews
    • Upgrade Personal Loans Review
    • Lending Club Review
    • Prosper Review
    • Ally Invest TradeKing Review
    • CIT Bank Review
    • LegalZoom Review
    • Lexington Law Review
    • Airbnb Host Review
    • Should You Drive For Uber?
  • Tax
  • Courses
    • Raise Your Credit Score So You Can Buy a House – Free Video Course

You Can Prevent Employee Theft – Here’s How

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

One of the best ways to make your business successful is to prevent employee theft.  And one of the worst ways to run your company is to assume your employees are honest.  Sorry…..but this is true.

According to a recent employee theft study, 75% of employees stole from their employer at least one time.  37.5% stole at least twice.  And get this….33% of all business bankruptcies are caused by employee theft.   In the United States, employees rip off $50 billion (with a “b”) each year.

Even if you aren’t the owner, if the joker who works alongside you is ripping off the company, he is endangering your livelihood and your job. If he gets caught and it’s discovered that you knew about it, you’ll likely get fired too. And if you don’t get a raise one year, it could be because the clown working at the next desk stole so much the company didn’t have the cash to pay you what you really deserve.  Unfortunately, employee theft is a huge problem for owners and employees alike because the people with the greatest access to the company’s assets are the staff.

How do you make sure your people don’t rob you blind?

1. Limit Access

Give access to people (assets and information) only as needed. If someone doesn’t need to access the books, assets and/or inventory don’t give it to them. If that need changes, change the access along with it. If you see something suspicious going on and you’re not the boss, you have no choice. You must tell your supervisor and document having done so. You have no obligation to cover up for anyone. Remember, this person is putting the safety and security of your family and everyone who works with you in jeopardy. If you are the owner, theft endangers your small business and at the very least, makes it worth a lot less to a potential buyer down the line.

2. Audits

Stage periodic and surprise audits. Reconcile inventory, assets and cash with your records. Most important, explain to the staff why you’re conducting these audits. Explain that the business needs to remain strong in order to safeguard jobs. And it’s not always hard assets you have to worry about. Let’s say Jim is responsible for buying the business insurance. You fear he’s been buying more expensive insurance for the business from his friend just to help him out. Maybe kickbacks aren’t even involved, but it’s still theft. Shop for business insurance yourself and make sure everyone is playing fair.  While you are at it, make sure to buy insurance against theft.   You can’t be too careful.

3. Talk It Up

If the staff understands the importance of anti-theft measures, they will become your eyes and ears when you’re not there. When your staff realizes that it’s in their interests to protect the company against theft, they’ll be a cost-free security system. Explain how added costs mean lower job security and fewer pay raises.

4. Hammer Time

When you catch somebody in the act, take swift and stern measures. How you respond to one dishonest person tells the entire staff that you won’t tolerate it. It doesn’t matter if the person helped themselves to $5 or $5,000. It also doesn’t matter if the person has been with you for years and years and years. Bad character is bad character. If you let this crook slide, you’re endangering the livelihoods of everyone else who works with you.

You don’t have to embarrass the person who demonstrated poor character, but you do have to fire them. Once a person has decided that your assets are fair game, they’ve gone down a slippery slope from which there is no return. You’ll be doing them a favor by providing a consequence for their actions.  Maybe they will clean up their act as a result.

Have you ever encountered someone stealing at your firm? How did you handle it? What was the result?

 

Tweet
Pin
Share1

Reader Interactions

User Generated Content (UGC) Disclosure: Please note that the opinions of the commenters are not necessarily the opinions of this site.

Comments

  1. Pat Murphy says

    January 28, 2011 at 5:01 AM

    You have alluded to the primary prevention method: controls. What I find interesting is that the supervisors who manage those have difficulty (especially is small businesses) enforcing them. They don’t like confrontation.

    The termination for theft must be backed up by a written policy. It sounds silly you have to write policy that says Don’t Steal but what exactly is “stealing”? Borrowing is theft. Cheating on time is theft. Put it in writing as best you can and enforce consistently.
    Pat Murphy

    Reply
  2. krantcents says

    January 27, 2011 at 1:15 PM

    When I owned a restaurant, I caught someone stealing. I fired him immediately. Sound controls and being around seems to stop 95% of it.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Are You Human? * Time limit is exhausted. Please reload CAPTCHA.

Primary Sidebar

Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
Read More »

Stay Connected

Facebook Twitter YouTube RSS

More Categories

Career Development
College Funding
Credit Cards
Credit Score Fixes
Money and Marriage
Debt Relief
Estate Protection
Property Investment Loans
Small Business Strategies
Spend Less Money

Disclaimer

Wealth Pilgrim is not responsible for and does not endorse any advertising, products or resource available from advertisements on this website. Wealth Pilgrim receives compensation from Google for advertising space on this website, but does not control the advertising selection or content. Please do the appropriate research before participating in any third party offers. The information contained in WealthPilgrim.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. Wealth Pilgrim does not provide investment advisory services and is not a registered investment adviser. Neal may provide advisory services through Wealth Resources Group, a registered investment adviser. Wealth Pilgrim and Wealth Resources Group are affiliated companies. In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving payments,access to free products and services for product and service reviews and giveaways. Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.


About · Contact · Disclaimer & Privacy policy

Copyright © Wealth Pilgrim 2022 All Rights Reserved