When it comes to detecting and preventing fraud, the unfortunate truth is that virtually all fraud is carried out by an employee that is trusted by management.  Now, as a business owner, this doesn’t need that you need to become paranoid and suspicious.  In fact, “trust” shouldn’t play a role in fraud prevention… the proper course is to implement a system of controls that make it impossible for an employee to perpetrate fraud without being detected.

While many business owners have heard that fraud and employee theft is generally committed by trusted employees, many of them have trouble taking that message to heart.  As a result, they remain vulnerable.  I once had a client who suspected that someone in his organization was stealing from him.  When we met, he discussed his suspicions but noted that there was one employee, a lady who had been with him for twenty years, that was absolutely trustworthy and could not be part of any wrongdoing.  Not only had this woman worked with my client for over two decades, but she also attended his church and was even in a prayer group with him!  Unfortunately, as the investigation proceeded, it quickly became clear that this trusted employee, in fact, had stolen over one million dollars from the company!  My client was both outraged and devastated at this violation of trust.

What lesson should be taken from this story?  First of all, you should understand that thinking “Old Sally would never steal from me” is always a mistake.  Unfortunately greed is a powerful motivator and can lead good people to do bad things.  But more importantly, the takeaway from this story should be that you need effective controls in place to prevent fraud. These systems are not difficult to implement—and by doing so, not only will you be able to detect fraud, but you will also provide your employees with a powerful incentive NOT to steal from you.  Often, fraud arises because an employee sees an easy opportunity and lacks the self-control to resist temptation.  Don’t put yourself in this position.  Don’t rely on trust alone to safeguard your assets.  Contact me today and we’ll help you create a system of controls that will prevent fraud from occurring in your business.