Who’s Zoomin’ Who? Employee Theft Part 2

If You Missed Part 1

In the first installment on employee theft we played a game of “theft prevention t-ball.”  It doesn’t get any easier than the two tactics we addressed last time:

  • Destroy all signature stamps and vow to never use them again
  • Limit check writing authority to the owner(s)

Should You Keep Reading

If you are not prepared to do both of these things, you can stop reading now.  You are officially unserious about preventing/stopping theft and there’s little else I can help you with in this area.  If you are done with the wholesale burning of signature stamps and taking on all the check writing authority yourself…you may continue.

In this installment, I present some additional steps that reduce your risk of becoming a victim of employee theft.  Keep in mind that each tactic works on its own but is exponentially more effective when paired with an overall strategy employing multiple approaches.

At The End Of Each Business Day

First, let’s discuss the process of preparing and making bank deposits.  Who can prepare and make deposits in the business?  Ideally, the only person doing this should be the owner.  In most practices the owner can do this quite easily.  Wanting to take on the additional administrative task is another story, however.  In some cases, this task must be delegated some of the time.  Make sure that is only delegated some of the time or when necessary.  The risk of theft increases in direct proportion to the number of times you have others take on this duty.  Also, divide up the task between multiple employees.  Make two employees responsible for different parts of the deposit process and have them act as checks and balances on each other.  While this does not guarantee that collusion won’t occur, it does decrease the odds significantly as well as increasing the odds of someone getting caught if theft does occur.  Also, create a daily cash report.  This adds an additional layer of protection for cash thefts.  I’ll add a quick and obvious one here as well: daily reconciliation of the cash drawer.  At the end of each business day reconcile the cash transactions report and the cash on hand in the cash drawer.

The Absolute Best Way To Ferret Out Any Wrong Doing Is To

I get to see funny things happen in the businesses I am hired to help.  It is amazing how often bad behavior is uncovered when a consultant is brought in-to the business.  These funny behaviors occur even when the consult has nothing to do with theft prevention and detection.  It is human nature, I guess, to assume that an outside expert will be able to better detect theft than an inside person.  In this case, human nature is correct.  The absolute best way to ferret out any wrong doing is to hire someone to investigate and put policies and procedures in place that are preventative.

What is that you say?  You would rather not spend truckloads of cash to do this?  And you are “absolutely sure” that your dedicated staff isn’t taking your money?  OK, try this – fake hire a consultant.  Announce that the consultant will be reviewing the money procedures because the insurance underwriters are offering a discount for doing so.  This gives you the opportunity to still be everyone’s friend while shaking the tree a little bit.  Plus, this becomes a great time to enact some new policies to prevent theft in the future.

Of course, I am going to tell you that actually hiring a consultant is better because it is.  But hiring a fake consultant is a good starting point.  Observe how people react and what changes after the announcement.  Often guilty parties get out of the way of any investigation that might lead to them getting caught.  If employees suddenly “disappear” it is time to figure out why.  Then you might find the cost of a consultant to be worthwhile.

More To Come

I will continue with specific recommendations in future “Who’s Zoomin’ Who” installments.  If you have any questions or comments do not hesitate to enter them below or send me an e-mail.  The questions I get from the blogs, clients, and lectures drive the topics covered in these blogs.

Maidir te,
John McDaniel, OD, MLHR

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