Employee Fraud Protection

The most common cause of internal fraud is unconditional, misplaced trust in one employee. Whether the person handling your money is your brother, mother or longest serving employee, it’s important to take steps to protect your business from insider theft.


Implement a code of conduct. Make it clear that fraudulent behaviour will not be tolerated and outline steps an employee should take if they suspect fraud.


Never leave financial tasks to one person. Ensure you have policies in place that allow for cross checks. Require two signatures on payments over an agreed threshold. Reconcile bank accounts weekly.


Screen new employees. Ensure that you fully reference check and screen any new employee, but especially those that will be handling money.


Monitor employee behaviours. Employees that stay late and never take a holiday may appear industrious but they may simply want time in the office alone. Also watch out for signs of lavish spending.


Conduct regular audits. Fraud is most often discovered during an internal audit, so it pays to conduct audits regularly. Not only will then enable you to catch fraud early, it may also act as a deterrent.


Spot check outgoing invoices EFT payments. In a busy office it can be difficult for an authorizing officer to check the bank details and amounts for every outgoing payment. So make sure you have a process in place for regular detailed spot checks.


Separate cash handling and financial reporting. No single individual should be responsible for making accounting entries, have direct access to cash and/or have the ability to authorize transactions.


Consider fidelity/crime cover insurance. This protects your business from loss of money, securities or inventory that may result from employee crime.


If you need help reviewing and updating your financial management systems please contact us.  We are here to help!

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