Protect your business from employee fraud.
While employees can be your business’s biggest assets, they can also pose a huge danger. Approximately 64% of small business experience employee fraud with median losses at about $145,000. As a business owner, you should do everything you can to protect your business from the fraudulent activities of an employee. So, learn more about employee fraud and learn how you can prevent it.
Common Types of Fraud
The three most common types of employee fraud are asset misappropriation, corruption, and financial statement fraud. Asset misappropriation is the most common of the three because any employee at any level in your company can misuse company resources. Asset misappropriation occurs when an employee steals company goods, forges checks, or uses company vehicles for personal use. Corruption generally occurs when an employee accepts bribes from vendors or issues unauthorized discounts in exchange for payoffs. Finally, financial statement fraud is committed by employees that handle the business’s finances. This occurs when they record fake revenues, inflate assets, and hide expenses.
Protect Your Business
One way to protect your business is by employing stringent screening methods when you hire a new employee. Conducting a thorough background check and following up with employee references could reveal undisclosed criminal activity and previous instances with fraud. Another way to protect your business is by monitoring your employees. You don’t necessarily need to micromanage your employees, but conducting surprise spot checks could reveal fraudulent activities. Finally, you can reduce your risk for employee fraud by establishing a code of ethics for your business. Stressing the importance of fair, legal business practices and encouraging employees to speak up if they notice criminal activities can deter employees from engaging in fraud.
Try out these suggestions to protect your business from the emotional and financial costs associated with employee fraud. Another way to keep your business safe is by having the right commercial insurance in place. To find the right policy to fit your needs, contact the dedicated team at Robert J. Los Insurance Agency in Hamburg, New York. We are ready to assist you with all your insurance needs.