The Cost Of Employee Theft
Sometimes an often overlooked area for small businesses is employee theft.
Although the general feeling is to trust your staff, putting preventative measures in place can be the difference between making or breaking it.
Employee theft is a fact of life for most businesses and is a big cost to the company. This mainly happens in the shipping and receiving areas where goods constantly move in and out. This can usually be checked by installing security cameras, guards, locking inventory warehouses and making sudden inspections. Returned goods could easily be funnelled off and sold secretly, while being shown as damaged good returned and destroyed. This kind of fraud should be controlled through strict procedures for returned goods.
“The Australian Retailers Association estimates that more than half of stock “shrinkage” is from employee theft. And the Australian Federal Police says 70% of all business fraud losses are from staff or former staff, amounting to at least $1.5 billion a year.”
Thus, through proper management and quality control, a company can identify and stop shipping and receiving errors, while controlling theft in these areas. Ignoring these could cost the company significant money, with a negative impact on cash flow. While it is human to err, repetitions must be checked. When there is intra-departmental and inter-departmental communication and cooperation, it is possible to create an awareness of cost control.