Do not be a victim of embezzlement, the invisible crime of opportunity
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EmailEmbezzlers are frequently your most trusted, most valued, least problematic and your hardest working employee.
As a small business owner, I have been ripped off by embezzlement. Thankfully, I became aware of it as soon as it happened, and the theft did not sink my business. Who was the embezzler? My accountant! The following is what I learned from being taken advantage of by a contracted professional.
Embezzlers defy any universal demographic profile, so you cannot spot one by sight.They work in all types of organizations. They can be schoolteachers, bankers, payroll clerks, executives, non-profit employees or bookkeepers of small businesses. My experience has taught me how to hopefully avoid it in the future.
Even though some signs of embezzlement are clear, many of us just ignore them.
One symptom of embezzlement is that your bookkeeper, whom you trust and believe would never betray you, never takes a vacation. You might attribute this to a sign of a diligent worker with excepitionaly strong work ethic. Unfortunatelly, this is also the way that embezzlers cover their tracks - by doing all of the bookkeeping so that no one else sees it.
Another symptom of embezzlement is that your bookkeeper takes work home with them, or works after hours. You may consider this a sign of a concerned employee who does not want to get behind on their work. But, this is an important signal that they do not want to be watched. It is easier to embezzle when no one is there to ask questions.
Yet another symptom of embezzlement is that your bookkeeper receives and posts all of the mail. You might attribute this to a helpful, diligent worker who goes above and beyond the call of duty to help out the team. However, this could be a signal that invoices or receipts are being diverted to different addresses than where they should be going. One common method of embezzlement is to create phony vendors and submit fraudulent invoices for payment. This can lead to the checks drawn from your business account to be sent to the employee’s home.
While this list is not exhaustive and there are many more symptoms of embezzlement, awareness is the key. You can prevent embezzlement with some easy best management practices. Review these simple ideas in my follow-up article on embezzlement, or contact me below for free business counseling.
Paul J. Werner is an Michigan State University Extension educator from L’Anse, Michigan. You can obtain free business counseling by registering with the MSU Product Center. Werner has many years of experience in small business ownership and entrepreneurship; he and his wife currently own two small businesses in the Upper Peninsula of Michigan.
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