Employee theft isn’t necessarily very common, but in some cases, it’s good to have some sort of plan to prevent it or deal with it once it’s happened. The best defense is of course having good, trustworthy employees. However, larger companies have a harder time getting to know all of of their employees. If you do happen to have any issues with employee theft, or think that it could end up being a problem, here are some general guidelines to handle it.
1. Having a Positive Work Environment
A positive work environment is essential to making sure that all your employees follow established procedures and policies. Acting in the best interest of the organization should come naturally to employees, and that is best accomplished when they feel satisfied with their workplace. Fair employment practices, clear communication between the employees and management, having an understanding human resource approach, and positive work recognition are some of the effective ways to promote satisfaction among employees.
2. Enforce Internal Controls
Internal controls are measures that are necessary to increase the efficiency and effectiveness of your company’s organization. Some of the essential internal controls are separation of duties, access controls and authorization controls. No employee should be responsible for both processing and recording a financial transaction. Financial and physical assets, information, and accounting information should be accessed only by authorized personnel. Moreover, there have to be strict policies in place to make sure how financial transactions are initiated, processed, recorded and reviewed.
3. Hire with Caution
This is a given for any company, be it small or big. Hiring honest employees is absolutely necessary to making sure that your company’s policies and procedures are followed religiously. Pre-employment background checks are one of the best ways to make sure that you’re not hiring dishonest people. Some of the ways to carry out background checks are criminal history, civil history, driving license history, verification of educational qualifications and details of previous employment. If you don’t have the resources to carry out these checks, then it is recommended that you hire a contractor. Implementing a strict pre-employment background check is essential to hiring good employees.
4. Implement “Employee Awareness” Programs
Inform your employees about how and where theft occurs on job sites. Creating education and awareness programs are the best ways to communicate your company’s ethics to your employees. Your employees should know your organization’s policies related to theft and fraud, and the disciplining procedures that will be undertaken for violating those policies.
5. Create an Anonymous Reporting System
Every company should have a way for employees, customers and vendors to report frauds and thefts anonymously. Many honest employees shy away from reporting theft because of the repercussions involved.
6. Carry Out Regular (and Random) Audits
Regular audits are essential to check whether your existing internal controls and policies are effective. Check finances, inventory, tools, equipment and other valuables during the audit. Personal checks are not recommended, but if you think they’re necessary, go ahead with them. However, to make sure that the audits are efficient, you should also conduct random checks without any prior announcements. This will reveal vulnerabilities that didn’t show up previously. Audits also make sure that your employees know theft and fraud are serious issues in your company.
7. Use Prepaid Cards Instead of Petty Cash
Handling hard cash is confusing and highly inefficient. The employee who spends the money has to get bills and record them. Prepaid cards are a much better prospect. Not only do they help in carrying out the transactions and eliminating petty cash, they also aid in recording the transactions immediately. As soon as your employee uses the prepaid card, all the transactions details are logged into the bank account associated with the respective prepaid card.
The above tips are just a few suggestions to reduce construction employee theft. Every business is unique and you’d have to test various internal policies and safety procedures before you find out what’s best suited for your small construction company.
About Bento for Business
Bento for Business offers a new generation of technology-driven SMART employee expense cards for SMBs, nonprofits, organizations and associations in the form of a business prepaid MasterCard. You can set monthly spend limits and allow only certain purchase categories (e.g. Bob the project manager can only spend $500/week and the card only works to purchase gas, hotels and at the hardware store). Turn cards on/off in real-time and receive SMS text message or email alerts for every purchase or decline. Enjoy unmatched visibility into cash flow, eliminate expense reports, and save time & money. Use this link to learn more and start your FREE 60-day trial of Bento’s business prepaid cards.