Workplace fraud happens more frequently than you may think. In fact, it’s estimated that the average company loses 5% of annual revenue to workplace fraud every year. Don’t get us wrong: most employees are loyal and ethical. However, the ones who want something will find a way to get it, and most frauds last 18 months to three years before being discovered. There are also no companies that are in the clear, even in Richmond, VA. Fraud happens at both large and small companies every year.
There are three main types of workplace fraud: corruption, financial statement, and asset misappropriation. Corruption, typically the most heavily penalized, includes acts like bribery and extortion. Financial statement fraud involves intentionally misrepresenting or omitting information on company financial reports. Asset misappropriation is the most common type of workplace fraud. It includes stealing cash, making false expense reimbursement claims, and theft of non-cash assets belonging to the company, which could include confidential client and patient information. So, how do you keep your workplace safe? We’ve compiled several things to look out for, as well as how Shred America can help increase your security.
- High Tension: When tension occurs between employees or between employees and management for an extended period of time, an environment of frustration is created. Though certainly not all tense situations will result in employees who want revenge, it does happen, so it’s important to listen to what’s going on within your company and try your best to keep everyone in reasonably good spirits. High tension can also become a problem when experienced outside of the workplace, as with an employee who feels an immense amount of personal pressure and strain outside of work. Desperation can make people do things they otherwise wouldn’t.
- Ignored Procedures: When policies and procedures fall by the wayside, it not only shows a concerning lack of general professionalism, but it also raises the question What else is sliding? Not to mention, when employees regularly forego following protocol, it indicates they don’t feel watched or held accountable. This is a main reason fraud happens for months or even years without being noticed.
- Lack of Communication: If you can’t remember the last time you spoke with each and every employee, that points to a breakdown in communication that can lead to a secretive atmosphere. It’s important to get to know each of your employees, even the staff that provides maintenance services. This face time has a psychological benefit: it makes people feel more accountable when committing a wrongdoing against you. It’s also a good idea to make sure employees are talking to one another. Many fraud cases are reported by other employees, so keep the line of communication open and welcome.
- Missing Segregation of Duties: Does your company segregate duties? You should. When you create a set up in which one employee is handling all the tasks of a role, you raise the potential for a checks-and-balances issue. Divide duties across different people in different departments so that no one person has all the information.
- Lack of Documentation: It’s crucial to have complete, organized record keeping for a lot of reasons, but one is so that you can keep up with what’s going on at your company. If you don’t frequently oversee what’s coming and going, it will be incredibly difficult to prove or even noticed when something isn’t adding up. Keep informed, and follow up, particularly when money is being moved.