Asset Misappropriation: How Do You Prevent This From Ruining Your Business?

Many entrepreneurs these days are building their businesses with corporate social responsibility in mind. They do this for various reasons. For one, they wish to pacify the public’s demand for socially responsible business practices. Others want to ensure they encourage social change by raising awareness on certain social issues. By setting a good example to the public, they can persuade consumers as well as other businesses to be more responsible when running their brand.

The unfortunate thing is that even businesses with great intentions can sometimes be infiltrated by ill-minded individuals. One of your employees could be using their authority to take inventories and supplies as they wish. There are also cases when non-employees can gain access to your business assets with the intention to ruin your business reputation.

When misappropriation occurs within your organization, you can end up paying for costly damages, lose a significant worth of inventories, and ruin your name to consumers and suppliers alike. It only makes sense to hire the services of a lawyer that handles business litigation cases. They can help you address issues concerning employees taking stocks illegally, pocketing business revenue, forging signatures, and other acts.

There are ways you can prevent asset misappropriation from ruining your business. The key is to have a policy in place that will make employees think twice before committing any malicious activities. Here are four tips you can consider.

Never Take Background Checks for Granted

Certain positions require honest and reliable individuals. This is especially true if you need to fill in a position where there is money, inventories, and access to various systems involved. The best way to mitigate risks is to ensure you conduct extensive background checks on potential applicants.

The same goes when promoting an existing employee. You want to make sure they have no records of theft, embezzlement, or fraud. You don’t want to risk your brand’s financial health just because you failed to conduct a thorough background check on your staff and applicants.

Give Limited Access to Employees

It does not make sense for your employees to have all access to various systems. It would be best to divide the tasks between different employees. For example, a different employee should be in charge of ordering stocks, receiving the orders, and auditing the inventories.

Doing this helps prevent anyone from stealing your inventories. Each employee in charge will have to coordinate with the others to ensure they receive the right amount of stocks. This also helps ensure that every item that goes out of your storage is well-accounted for.

Monitor Your Employees

There are certain indicators that can tell you which of your employees are already planning or already executed plans to take advantage of your business. For one, they had a sudden shift in attitude. More often than not, an attitude change can already say a lot about staff or two.

Note that not all employees who suddenly change in attitude are already suspects. But keeping an eye on them will help you realize what their current situation is which could have led to their shift in attitude. Monitoring them will help deter fraudulent activities while finding ways to keep your top talents happy and satisfied.

You can conduct surprise employee checks and performance evaluations. This way, you can determine if any of your employees are unable to perform as expected or if anyone is acting suspiciously. This will also help you check if any of your employees are stressed out due to their heavier workload or their team leader’s unrealistic expectations.

Create an Anonymous Reporting System

man working on his laptop

There are employees who are afraid to report fraudulent acts committed by other staff or company leaders. They are either afraid to lose their job or simply has no proof to present. Nevertheless, it is crucial that your employees get to report suspicious activities without putting their jobs at risk.

An anonymous reporting system will give all employees an equal opportunity to voice out their concerns to the management. You get to keep your best talents and start investigations as necessary without putting your as set out in the open. Make sure you also create a policy that will ensure just investigation will take place.

Only Hire Reliable Experts

When it comes to anything related to your brand’s finances, it pays to put your trust in tried and tested professionals. This why there are certified professionals rendering their services. You want to make sure you’ve done enough research before you hire an accountant, fraud examiners, and fraud forensic professionals.

Check their reviews as well as their credentials. Don’t be afraid to interview them and do a background check before hiring. Also, it pays to talk to partners and past and existing clients to make sure they are offering quality service.

Many businesses already suffered from asset misappropriation. The last thing you need is to become another victim of unreliable employees. Knowing how to prevent this from happening and what to do in case you come across a bad hire is the best way to protect your brand against employee-related fraud.

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