Are you a victim of employee theft? Did you know that employee theft has cost from small businesses to major Fortune 500 companies over $37.14 billion in 2010 alone? Fraud against business includes the theft of physical assets such as cash or inventory. Essentially there are two types of inventory fraud: physical loss and financial statement fraud.
Inventory shrinkage is the term use in accounting to describe the loss of inventory. Loss of inventory might be due to shoplifting, employee theft, damage, etc. Inventory fraud can occur in any company. Nearly 50% of retail inventory shrinkage comes from employee theft. Dr. Hollinger, who conducts the National Retail Security Survey, reported that shrinkage (as mentioned before) has …show more content…
A surprise inventory count should be performed from time to time. White-offs for damage items should be double check for validity. You can also place security cameras is strategic places and actually review the videos for any abnormalities. Keep the back door closed and alarm it, (this is the easiest way for employees to sneak out merchandise). It won’t be a bad idea if managers inspect the garbage before it’s taken out since this is frequently used by employees as well. Most importantly, make sure that your employees are aware that you are keeping an eye on everything, this way you can prevent theft from occurring due to the fear of getting caught.
The company’s software can also be a helpful tool. Take a look at you voided, cancelled, deleted sales report every day. Do not share passwords and limit employee’s access to the software. Shipping and receiving duties should be separated from those who have the responsibility to issue invoices or pay bills. Variances in your financial reports should be explained and investigated by the individuals in charge.
In the case of the management company where I work, we now have cameras places at the front desk where the tenants make their payments and also in the warehouse. The executive director can monitor the employee’s actions from his smartphone when he’s not at the office. The maintenance guys are now required to bring a copy of the