Small businesses are more likely to become victims of fraud and theft than larger companies. These business owners take considerable pride in being able to offer family members, friends and friends of a friend employment based on their mutual trust of one another. Likewise, long serving employees are regarded “like family”. Unfortunately, that same trust that might propel a business to great success can also be its undoing. Business fraud can and often does occur with trusted employees.
As outsourced accountants providing businesses with internal control advice and services in the prevention of employee fraud, we have found that the typical employee thief does not fit the criminal stereotype, has worked at a company for anything from 4 years and upwards, is in good standing and is usually a first time offender.
When employees are faced with personal financial stress, even the most trusted employee might succumb to temptation to take the business’s money with the idea of either paying it back, which they never manage to do, or they might justify the takings as a form of entitlement for more money for their loyalty and hard work. Business owners, on the other hand, believe that employees will never violate their trust.
Unfortunately, this belief can see thousands, and even millions of rands over several years disappear, as fraud usually grows over time. It would take many more years to generate the income to recover the theft, if the business can continue to survive at all. In this month’s BAN Bulletin, Monique Sharland provides tips on what small business owners can do towards protecting their business against employee fraud, the incidents of which Business Accounting Network and our legal alliance partners have seen increase substantially due to the challenging economic climate.
Click here to read our article – The Reality of Employee Fraud