The Smart Way To Deal With Fraud in Your Business

Every employer faces risks in their organization. Fraud is one of the most serious of all. When fraud occurs in small companies, it can be a massive dent in your pride, as well as your ability to do business.

 

In addition, it could do your reputation a disservice. So, when it comes to dealing with an employee that has committed fraud, how do you go about it?

 

Keep in mind that these are serious legal issues that should be discuss with an experienced attorney.

 

Detecting Employee Fraud

 

Before you go and set the alarms and consult a white collar crime lawyer, you’ve got to keep an eye out for red flags. The big problem, when we suspect an employee of fraud, is that the guilty party may have already won over your confidence. This is why it’s important to remain professional throughout the process, and you can start by looking at the cold, hard facts.

 

Some of the red flags include an employee spending more money than their means, guarding their work duties, or even resisting vacations. An employee who seems incredibly enthusiastic, and turns up to the office before you do, and leaves after you, is another red flag.

 

What Do You Do When You Suspect Employee Fraud?

 

It is vital that if you suspect an employee of misappropriation or another type of employee fraud, you’ve got to move quickly. But you have to be careful.

 

The longer you wait, the more an individual can take from you, but also, you have to be careful as there are strict HR procedures to follow. If you do not catch the employee red-handed, you need to take your time in gathering evidence.

 

If you accuse them without any evidence, you may find yourself at the receiving end of a lawsuit. When you have sufficient evidence, meet with the employee alone and lay out your case. Once all the facts are in place, and the employees willing to give up some of them, if you have enough evidence, you can let them go.

 

It is up to you if you want to take legal action at this point. This will depend on the losses. If they are not significant or are covered by insurance, it may not be worth your while.

 

Learning and Moving On

 

There will be lessons everybody has to learn. You may think harder about how best to look after your employees, or if you were too trusting. The important thing in a professional sense is that you’ve got to make sure that the lesson reaches the other employees.

 

It’s crucial to remember that some employees may very well have learned the cracks in your armor. This could motivate them to imitate the individual that was let go, which is why you have to make sure that every employee is aware of the repercussions.

 

From your perspective, you may have regretted being too trusting, but this is not fair. Individuals can abuse trust, and this is why the procedures need to be in place. It shouldn’t be something that you regret or stops you from hiring someone in the future, but it’s about making sure that your business is able to deal with it.

 

 

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/