9 tips on preventing theft by your employees
Many businesses have gone down due to theft by employees, Nakumatt being the most glaring example. Kefa Nyakundi, director of Africa Risk Institute, speaks to JACQUELINE MAHUGU on how you can prevent this
1. Split financial duties
No single person should have 100 per cent knowledge and control of the finances of YOUR business. Such a person would be in a position to tweak figures and steal undetected. Let different money-handling responsibilities go to different people, and keep rotating those duties irregularly.
2. Finance matters only in the office
SEE ALSO :Exit of eateries from the CBD serves lessons on our tastes
All work involving handling of money should be done from the premises, and not at home. Financial transactions should be completed and reconciled by the end of the day. Every employee should be aware from the start that they take personal responsibility should any amounts go missing.
3. Restrict access
Only specific people should be able to access company accounts, from petty cash to bank accounts. Only you as an owner should be able to write cheques. Do not keep extra cash around unnecessarily, and any access to it should be meticulously recorded.
4. Do thorough checks regularly
Personally assess and analyse every aspect of your business, from the financial records to employee records and taking note of how they work.
SEE ALSO :Graft hinders growth of family businesses
Do this unexpectedly to keep everyone on their toes and not give wrongdoers a chance to cover their tracks, as well as to give yourself a chance to identify issues and weaknesses before they escalate to bigger problems.
5. Get other people to look at your books
As the business owner you may be thorough at looking at your records, but a professional would be able to spot discrepancies that you otherwise would not see.
Get someone from once in a while who can look at your numbers and ask the relevant questions objectively, which could help detect those discrepancies and other weaknesses that make your business vulnerable.
6. Make your policies clear
SEE ALSO :State owes SMEs an economic stimulus
Ensure that every employee is aware of what would be considered theft and the consequences of being caught having stolen from the company, which should offer no prior warnings.
They should append their signature to a document that indicates that they understand the policy. Any changes should also be communicated clearly and in writing.
7. Assure the safety of whistle-blowers
Things may not be caught even with a system of checks and balances in place, but someone can spot something as an individual.
Develop a system where people can report any in house unscrupulous dealings anonymously, are assured of their protection and even input a reward mechanism to encourage people to volunteer information.
SEE ALSO :Numbers reveal how 31 companies' profits plunged8. Keep an eye on purchases
Supplies and purchases are some of the areas in which it is easiest to steal. Place controls here, just like in every other area, where you distribute functions and give them to different people.
For example, the person who issues an order is different from the person who receives and a different person inspects and so forth.
9. Do background checks on prospective employees
Verify the information people give you at the point of employment, because not screening employees means you may be bringing in fraudsters to your company.
In addition, you can conduct lifestyle audits when you employ them. This does not have to be formal, but you can be observant. If you are paying someone Sh100, 000 but their lifestyle indicates a much larger income, it could be a red flag for your business.
10. Use and be cautious with technology
Very simple things like password management can expose your business to fraud. Check that your emails, credit cards, accounting systems and so forth are well protected.
Keep up with the latest ways to protect your business using technology and conduct regular professional inspections of all your technological systems.
You can even engage ethical hackers who will attempt to hack into your systems and identify its weaknesses and therefore fix them.
For the latest news in entertainment check out Sde.co.ke and Pulser.co.ke , for everything sports visit Gameyetu.co.ke and ladies we have you covered on Evewoman