Every successful business owner or manager is required to be firm and confident when dealing with operational proceedings as well as when administering employee responsibilities. With statistics indicating that over 75% of workers commit employee theft within an enterprise and another 75% of such acts going unnoticed, companies are under a significant threat of incurring setbacks without the incorporation of proper security management tools within the system.
Unless encouraged otherwise, it is human tendency to feel exploited and underappreciated by the employing company, which is the primary reason why most thefts by employees materialize. Some of the resources that are most frequently vandalized are monetary funds, produced goods, professional supplies and sensitive financial information. As the proprietor of an enterprise, you have to protect operational resources and prevent such larceny through one or all of the following methods.
1. Maintain an Inventory Record –
In every business, inventory consists of primarily two kinds namely, office supplies and product inventory, which need to be handled appropriately, to escape embezzlement. Maintaining professionalism in the workplace with regards to proper means of accounting for office accessories, will go a long way in ensuring that the employees feel responsible for routine supplies and therefore no pilferage is encountered.
With most inventory management operations becoming automated, the chances of experiencing employee theft, though possible, are quite unlikely. Having a proper filing and reporting system for sales and invoices ensures that the paperwork is in order, while at the same time, measures such as regular internal auditing and proper supervision keep the executives under check as well. This arrangement helps in making logistics management more transparent within the organization.
2. Hire Smartly and Supervise –
For a company to be efficient in its execution, it is imperative that the employed workforce is honest and hardworking. At the most primitive level, the hiring process should include a rigorous background check of the candidates as a resume can be unreliable and fraudulent. Ensure that not only the candidates’ qualifications but also their credentials are verified to be legitimate. All such tasks become more comfortable with the help of a competent and reliable HRMS solution.
Post the recruitment and induction phases; employees need to be supervised so that they can carry out their designated tasks as instructed. Filter out troublemakers by carrying out regular drug tests and encouraging a system of whistleblowing and teamwork. Another way of keeping people engaged, while avoiding employee theft is by constantly rotating them within the system. By engaging workers in different jobs, familiarization with security systems can be avoided, thereby leading to fewer thefts.
3. Manage Cash Flow Effectively –
Apart from inventory, the other resource that can be tampered with is cash flow. Money is the end game of each fraud, must be carefully monitored and accounted for. Unless a transparent channel of cash flow is not administered, it would be practically impossible to trace theft by employees from within the system.
In order to avoid such occurrences, control must be enforced on all financial documents including sales logs, retail receipts, cheque books and cash registers. Make sure that a major portion of all transactions from the company’s end is carried out via online transactions and company cheques marked for deposit. File all purchase orders and ensure that bills are generated and logged for internal audit and income tax purposes.
Employing an efficient and honest accounts team further enhances the credibility of the system and helps in rectifying financial errors which may not be in compliance with legal regulations. M
4. Restrict System Control –
The idea of having different hierarchal levels in any business is concentric around responsibility, which in turn dictates the amount of accessibility that a person experiences within the framework of the organization. Having various access levels divides employees on the basis of the type of duties they can be entrusted with.
Allowing unhindered access to each and every employee is unacceptable as it may lead to the leakage of sensitive information and/or tampering with critical documents. By hiring vendors that specialize in data encryption services, employee theft through the company’s ERP, CRM and HRMS solutions can be avoided and traced back to the source.
Other effective ways of ensuring security through system control are by destroying all unwanted company documents, having biometric identification systems installed, password-protecting individual system accounts and locking up all sensitive items in designated areas within the workplace.
5. Conduct Routinely Audits –
Internal audits are a general practice followed by all reputed organizations to ensure a streamlined flow of work is maintained. Audits assist enterprises and their employees in determining the shortcomings of the system with regards to the efficiency of sales processes and regulatory compliance.
Conducting regular audits and surprise inventory checks reduces the risk of theft by employees and forewarns suspicious characters from carrying out illegal activities. Audits act as subtle reminders about company policies and procedures, further solidifying guidelines along which operations must be carried out effectively.
6. Setup Security Measures –
For the sake of safety and security, certain harsh yet necessary steps must be taken by every business owner. Setting up video surveillance is one of such steps that is essential and makes a great deal of difference in determining the attitude of employees within work premises. The knowledge of being watched all the time will create a sense of hesitation prior to the thought of carrying out any kind of theft.
Another highly effective method of avoiding fraudulent transactions and anomalies is by activating and recording red flag reports within the system. This will prevent fraud through sales processes by pointing out abnormal refund calculations and accounting errors. Having separate security teams to monitor such processes when carried out on a large scale may turn out to be more effective as long as cross-checking of such operations are carried out timely and frequently.
The problem of theft by employees has persisted through generations and cannot be completely eradicated. It can, however, be controlled through close monitoring and following security protocol. Remember that in order to curb any security or theft-related incident, you must avoid making compromises at any step. Wants to know more about exactllyHRMS? feel free to Contact Us and get a Free Demo.
Leave a Reply