Embezzlement is theft. It’s more “highbrow” than Jean Valjean stealing a loaf of bread to feed his starving nieces and nephews, but it’s still theft. One wonders if Javert would have pursued a white-collar criminal with as much zealousness as he pursued Valjean. In any event, there are certain steps that you can take to protect your company from this kind of thief.
1. Do Background Checks
Someone may show up in a $5,000 suit, wear a Rolex, and have an alligator-skin attache case. Also, that person could have stolen all of those items. Don’t take anyone at face value. Hire a competent investigator to do the background checks for you. Any honest employee won’t balk at this, so you can probably weed out the least desirable employees simply by mentioning background checks.
2. Separate Duties
If you ask a lawyer, then that person will tell you that separating jobs within the company will prevent embezzlement because it creates more opportunities for it to be noticed. If just one person is authorized to make all the decisions regarding pecuniary decisions, then the phrase “power corrupts” certainly applies. “Power corrupts,” becomes modified by, “Oh, they’ll never notice.” If you have multiple layers of approval needed to authorize transactions, then you drastically lower the chance that someone can get away with embezzlement. Also, by assigning oversight duties to more than one person, you create a secondary network that can catch the crooks for you.
3. Audit, Audit, Audit
Hire an independent auditor to check everything. In fact, hire two, and have them check not only your company’s finances but also each other. By placing the responsibility with independent entities, you prevent not only conflict of interest but also the appearance of favoritism or other impropriety. Keeping track of everything also lets you see both raw numbers and analyzed data. Therefore, not only will you be able to curtail chances for embezzlement, but you’ll also be better informed regarding the state of the company.
4. Insurance
If someone wants to break into your home, then that person will do so regardless of security. The same applies to someone stealing from your company. And, that person could be smart enough and careful enough not to get caught. For these rare occurrences, it’s a good idea to have insurance against this kind of crime. The coverage will let you replace the lost funds without spending valuable resources and time searching for someone who very likely won’t be found. This also protects you from minor embezzlement. You don’t want to spend hundreds of thousands of dollars on investigators to track down some guy who walked with $10,000. Instead, file a claim, and be done with it.
5. Pay Your Employees Properly
If your employees are paid well, then they’ll have fewer reasons to steal. As an analogy, you’ll have fewer mice stealing crumbs if you don’t have any crumbs on the floor. Well-paid and appreciated employees will be more loyal than others, too, so they’d have even fewer reasons to steal.