Checks and Balances

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If you are a single person operation, you don't have to worry about checks and balances when it comes to finances and your business, but once you hire employees you need to ensure that you have checks and balances as a firewall to an employee robbing you blind.

A couple of weeks ago I talked about an employee that ended up steeling $10,000 from a company simply because they did not check peoples bags as they walked out the door.

Many small business owners do not want employees to think that they are not trusted so they do not put in necessary checks and balances to protect themselves against theft. You need to create a balance between protecting your employees and creating an environment of trust.

Here are some examples of creating checks and balances in your business.

If your company has credit cards (I recommend debit cards), either assign a card to a specific person. If you only have one card to go around, have employees sign the card in and out and if something shows up on the bill that you have no receipt for, you will know who had the card at that time and talk to that person.

Checks should require two signatures to be valid. Another alternative would be to put things such as utilities on EFT so there taken out of your account directly. This will require you to check the bill and make sure there is funds in the account to cover it, but then you are writing fewer checks and there is less chance that one will fall into the wrong hands.

Bag checks are another easy way to deter theft. If your employees know that their bags will be check when leaving the store, they are less likely to put something in there that does not belong. You will need to check the rules in your jurisdiction to see what rules you will have to abide by to avoid costly litigation.

Another big area that is becoming a concern is computer usage. Do you have employees spending more time surfing the web instead of performing important tasks? While this may not be direct theft the employee is still stealing from your business because you are paying them but they are doing personal things on the computer. Computer monitoring software could be a wise investment to insure your employees are doing what they should.

These are just some basic ideas to protect your business. It is not an all inclusive list but hopefully it will give you some ideas to keep money from walking out the door.

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Losses are Increasing from Theft...

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Losses from theft has been increasing recently due to the economy and other factors, so in the future I will dedicate some space to talk about what I am currently observing so that you as a business owner or company can be sure to be looking out for these and try to prevent them.

A few entries ago I mentioned how you have to look out for that employee you would not expect theft from. Today I am going to tell you some of the what I am seeing going on in stores today that will cause you theft if you are not careful.

One of the things that you always have to watch for is the decoy or distraction. This is a person that is designed to distract those looking for shoplifters or other thieves. The decoy will carry in the backpack and just walk around the store looking suspicious while someone else is actually going through and shoplifting.

The other is the person designed to distract employees. This person will find an employee and try to distract them from the person doing the shoplifting. While this is been happening for years what is on the rise recently is the number of people using their daughters or sisters to be the distraction.

The girl will dress up in tight jean shorts or something else design to provoke the male employee to be distracted and not pay attention. The sad part of this is some of the girls have been in the 12-15 year old bracket and dressed up very provocatively.

The latest incident I saw the young woman who was in the aforementioned age bracket dressed in the jean shorts and showing lots of cleavage distracted the teenage male employee while the brother stole hundreds of dollars in game console games. They then headed to a waiting car being driven by the father who was running the ring.

Parents are not just using their teenagers to steal for them. Another disturbing trend is parents sending their young children in to steal for them. Since kids are often ignored unless they are destroying something or in a toy department, the kids will be instructed to walk around the store and pick things up.

A recent incident I observed was a 10 year old who went around picked up some clothes, changed in the fitting room then walked out to the car to the waiting parents.

I wish I could say the above incidents where isolated events but I have seen reports and the incidents in many locations for myself.

Of course you always have to be looking out for credit card fraud and stolen cards. Once case is people are going into stores buying lots of gift cards and clothes and trying to use a stolen credit card. When it comes up as needing authorization the people will tell the cashier an authorization number that will work and they go off. This means that people ringing customers up need to be more prepared than ever for these kinds of attempts.

These days you need to be more aware that ever to ensure that your company doesn't take serious hits in theft.