Five Steps to Safeguard Your Business from Embezzlement

7/6/2016 10:41:00 AM
By Jay Myers

Sustaining and growing an AV integration firm in 2016 has never been more challenging with a wide variety of industry issues to contend with, such as margin erosion, increased competition, rapid changes in technology, and hardware commoditization. There are more than just a few issues to keep the owner of an AV integration firm awake many a night.

With all the stress of running an AV integration firm these days, the last thing an owner needs is something else to worry about. Right? But there is another important business issue to beware of, one with potentially catastrophic effect on the business. That issue is employee embezzlement, and unfortunately, I've had personal experience with it.

Several years ago I discovered that my accounting manager stole over $250,000 from my company (ISI) the day after I read an article about embezzlement in a business magazine. Shocking? You bet! Scary? Absolutely! And to make things worse, the theft started within days after my older brother (John) unexpectedly passed away when I was at a vulnerable low point.

So what can a business do to protect itself from embezzlement?

 

1) Take away the opportunity to steal by establishing disciplined processes in the finance department, such as reviewing credit card transactions, purchase orders, etc.

2) Segregate the accounts payable and receivable departments. Don’t have the person collecting your money be able to spend it. 

3) Conduct a thorough background check (both civil and criminal) on all employees.

4) Make sure that all bank statements are first reviewed by the business owner.

5) Promote an ethical culture in your business with all employees, suppliers, customers, etc.

 

Lastly, by imposing a zero tolerance for dishonesty and unethical behavior, a company has the opportunity to firmly establish its brand and commitment to "doing business the right way." And also to keep it safe. That's a winning formula that will work for any type of business for years to come.

 

Jay Myers is the founder/CEO of Interactive Solutions, Inc. (ISI), a Memphis-based firm that specializes in videoconferencing, distance learning, telemedicine, and audiovisual sales and support. He is the author of Keep Swinging: An Entrepreneurs Story of Overcoming Adversity and Achieving Small Business Success and Hitting the Curveballs: How Crisis Can Strengthen and Grow Your Business.

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