Business owners have a lot to worry about: budgets, taxes, customers, employment, and marketing, among other things. When it comes to business losses, business owners may think about crimes like robberies, shoplifting, and other similar acts. However, what they don’t consider is that employees can sometimes be the perpetrators of these acts.
These crimes, often called white-collar crimes, make up 3% of federal prosecutions every year. White-collar crimes often include embezzlement, money laundering, and fraud. As much as many business owners and managers don’t want to believe that their own employees could commit such acts, 25% to 40% of employees steal from their employers, often causing businesses to fail.
While it’s good to put your trust in your employees, it’s also important to keep your business safe by taking precautionary measures to prevent these crimes from happening.
Consult with an Attorney
Before starting your business, you must hire an attorney to help you and your business provide legal assistance. Not only can they help remind you of your legal rights as a business owner, but they can advise you on how to prevent white-collar crimes and how to take action in case it happens to you.
Screening your employees is good for your business in various ways. Consider doing background checks on your employees: try to personally read applicants’ CVs, checking their social media accounts, and schedule a personal (and in some cases, written) interview with the applicant to see how they respond to your questions and what kind of person they might be. While this may not help you figure out whether they may commit any crimes while working for you, you can at least reduce the chances of it happening while making sure that you’re adding competent and capable people into your team.
Invest in Network Security
As we live in the era of technology, most of a company’s data is stored online, making it easily accessible for anyone with ulterior motives. In fact, white-collar crime these days is committed via the internet. Avoid this by hiring software technicians that can help you monitor the websites, social media, and other online sites that your employees visit during office hours. It also helps to regulate internet usage on company grounds by limiting access to suspicious sites.
Register with a Third-party Reporting Agency
Providing a way for employees to file complaints anonymously. Consider registering with a third-party reporting agency that allows employees to voice their concerns. The agency then forwards these comments and concerns to the appropriate people who can investigate and deal with them.
It’s important to strictly segregate responsibilities among employees. For instance, those who approve and reject certain financial decisions should not be the same people who implement these decisions. When many employees are being laid off at a time like this, it can be hard to maintain the proper segregation of duties, but this helps prevent your business from certain types of fraud such as payments to fake suppliers and similar crimes.
Check Inventory Regularly
If you manage a business that needs a stock of items to keep running, assign a trusted member of your team to check on the inventory regularly. If you have time to spare, you can also do the checking yourself. By doing this, you reduce the risk of theft, and you can make sure that all purchase orders add up to the number of items you have in stock. This is especially important when running a made-to-order business, as any missing product can cause delays and unhappy customers.
Protect Your Assets
In addition to checking on your inventory and segregating responsibilities, it’s important to keep your assets secure. There are a couple of ways to go about this, such as having surveillance cameras installed on your property or availing of armed property security services to keep a watchful eye on what matters. Not only does this help protect what’s important to you, but it also ensures a safe working environment for you and your employees.
Do Routine Audits
A majority of white-collar crimes involve finances: embezzlement, money laundering, bribery, etc. No matter what business you run, you must keep a strict eye on the finances coming in and out of your business. Make sure your money is where it should be by doing internal audits. This helps ensure the security of your information and the regulation of compliance, and it helps prevent employees from cheating you out of your own company’s money. Make sure to schedule audits unexpectedly so any employees looking to tamper with documents won’t have the time to do so.
White-collar crime can be harmful to you, your business, your employees, and your consumers. These methods can help you reduce or even prevent these crimes from happening and keep your business running. While these all require you to invest time, money, and energy, these investments will help keep your company running smoothly alongside employees you can trust.