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Having anti-fraud measures can decrease the amount and duration of employee fraud schemes. Here’s what you should do.
This outlines what the ethics of the organization are. Many businesses confuse it with a mission statement, but it speaks more to values and rules than your professional objective. Employees should sign this code on a yearly basis.
Policies and procedures should include everything from expense filing and acceptable use of the computer to position outlines (titles and their corresponding roles and responsibilities). This document should be as thorough as possible, and should include policies around social media. Have employees sign it.
Lawsuits filed by current and former employees against their employers are becoming more common. (The Dayton Business Journal reports claims and investigations against American businesses regarding the Fair Labor Standards Act have risen more than 35% percent in three years.)
Check with your legal counsel to see if they have an employment law specialist. If not, ask for a recommendation.
Have a strategy outlining what your business would do if fraud was detected. This includes knowing who you should contact right away and what your first steps would be (for example, putting the employee on paid leave, how or if you tell other employees, etc.). Also, what about your media strategy? Consider discussing this with your employees. Remind them that if they make any comments about a former employee or the details of the situation to the media, they could face legal repercussions.
Fidelity insurance protects a firm from losses caused by the dishonest acts of its employees. This rider on your insurance policy may allow you to recover money that was stolen, as well as pay for an investigation into the fraud.
No matter what policies you have in place, or how established your code of conduct and procedures are, the behaviour and conduct of senior management will establish how everyone else responds. As an owner or manager, if you spend time on social media and expense non-business lunches, your employees may think they can do the same.
Establish yourself as the boss, and make sure everyone you work with understands your role and responsibilities, and vice versa. Staying in tune with your employees personally may seem like a given in a small business, but often when we get comfortable we stop asking work-related questions.
Having anti-fraud measures can decrease the amount and duration of employee fraud schemes. Here’s what you should do.
This outlines what the ethics of the organization are. Many businesses confuse it with a mission statement, but it speaks more to values and rules than your professional objective. Employees should sign this code on a yearly basis.
Policies and procedures should include everything from expense filing and acceptable use of the computer to position outlines (titles and their corresponding roles and responsibilities). This document should be as thorough as possible, and should include policies around social media. Have employees sign it.
Lawsuits filed by current and former employees against their employers are becoming more common. (The Dayton Business Journal reports claims and investigations against American businesses regarding the Fair Labor Standards Act have risen more than 35% percent in three years.)
Check with your legal counsel to see if they have an employment law specialist. If not, ask for a recommendation.
Have a strategy outlining what your business would do if fraud was detected. This includes knowing who you should contact right away and what your first steps would be (for example, putting the employee on paid leave, how or if you tell other employees, etc.). Also, what about your media strategy? Consider discussing this with your employees. Remind them that if they make any comments about a former employee or the details of the situation to the media, they could face legal repercussions.
Fidelity insurance protects a firm from losses caused by the dishonest acts of its employees. This rider on your insurance policy may allow you to recover money that was stolen, as well as pay for an investigation into the fraud.
No matter what policies you have in place, or how established your code of conduct and procedures are, the behaviour and conduct of senior management will establish how everyone else responds. As an owner or manager, if you spend time on social media and expense non-business lunches, your employees may think they can do the same.
Establish yourself as the boss, and make sure everyone you work with understands your role and responsibilities, and vice versa. Staying in tune with your employees personally may seem like a given in a small business, but often when we get comfortable we stop asking work-related questions.
Being part of a small business can feel like being part of a family. The close camaraderie and relationships you build are one of the perks of staying small. Unfortunately, as a result, many small biz owners think employee misconduct or fraud won’t happen to them.
They’re wrong. In 2011, approximately 20% of businesses were victimized by fraud, finds a benchmarking study by the Association of Certified Fraud Examiners (ACFE).
Of those affected, small businesses suffered the largest median losses in occupational fraud at $200,000. The study also found the industries most commonly victimized were banking and financial services, the government, public administration and manufacturing.
Read: Fraud in dental and other professional offices
Further, businesses of 10 or less employees are more vulnerable to misconduct because employees tend to have more responsibility and less supervision than in larger companies, and statistically most occupational fraudsters are first-time offenders.
There is a difference between theft and fraud. While theft is usually detected quickly and repercussions are felt immediately, fraud and misconduct detection can take about 18 months.
Read: Canadians underrate fraud risk
Source: ACFE 2012 Report to the Nations on Occupational Fraud and Abuse
Having anti-fraud measures can decrease the amount and duration of employee fraud schemes. Here’s what you should do.
This outlines what the ethics of the organization are. Many businesses confuse it with a mission statement, but it speaks more to values and rules than your professional objective. Employees should sign this code on a yearly basis.
Policies and procedures should include everything from expense filing and acceptable use of the computer to position outlines (titles and their corresponding roles and responsibilities). This document should be as thorough as possible, and should include policies around social media. Have employees sign it.
Lawsuits filed by current and former employees against their employers are becoming more common. (The Dayton Business Journal reports claims and investigations against American businesses regarding the Fair Labor Standards Act have risen more than 35% percent in three years.)
Check with your legal counsel to see if they have an employment law specialist. If not, ask for a recommendation.
Have a strategy outlining what your business would do if fraud was detected. This includes knowing who you should contact right away and what your first steps would be (for example, putting the employee on paid leave, how or if you tell other employees, etc.). Also, what about your media strategy? Consider discussing this with your employees. Remind them that if they make any comments about a former employee or the details of the situation to the media, they could face legal repercussions.
Fidelity insurance protects a firm from losses caused by the dishonest acts of its employees. This rider on your insurance policy may allow you to recover money that was stolen, as well as pay for an investigation into the fraud.
No matter what policies you have in place, or how established your code of conduct and procedures are, the behaviour and conduct of senior management will establish how everyone else responds. As an owner or manager, if you spend time on social media and expense non-business lunches, your employees may think they can do the same.
Establish yourself as the boss, and make sure everyone you work with understands your role and responsibilities, and vice versa. Staying in tune with your employees personally may seem like a given in a small business, but often when we get comfortable we stop asking work-related questions.
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