Quality Should Be Your First Consideration

My employee is engaging in fraud. What do I do?

On Behalf of | Jul 21, 2023 | Business Disputes

From ensuring compliance with applicable regulations to marketing, dealing with vendors and managing day-to-day operations, running a business is anything but a walk in the park. As a result, you likely need support in the form of employees to run your company. When you hire an employee, you trust that they will put your business’s interests first and work diligently to ensure its success.

Unfortunately, trust can fall under the bus, and a person whom you bring on board might end up engaging in fraudulent activities. Left unaddressed, this can lead to significant losses to your business. Worse still, these acts might end up landing your business in trouble with the law. If an employee is committing fraud, you need to take steps to address the matter. But first, you must be sure they are indeed engaging in fraud.

Identifying signs of fraud

Most entrepreneurs are rarely “numbers people.” As such, they may not automatically read the writing on the wall. That said, here are a couple of signs you need to look out for if you suspect that one of your employees is dipping their fingers in “the cookie jar:”

  • They are making unauthorized changes to the company’s financial books
  • Cash transactions remain unreconciled for months
  • The employee in question doesn’t like taking time off so someone else can do their job
  • Unexplained inventory shortages
  • Company payments (like payments to vendors) are not accounted for
  • Missing cash

It is easy to overlook these signs as innocent employee errors. However, failure to act on them can cause problems down the road.

What do you do if you suspect employee fraud?

The idea of dragging an employee to court can be unimaginable for most people. However, it is important to understand that employee fraud is never the price one simply must pay for being in business. If you suspect that your employee is engaging in fraud, it is important that you gather as much evidence as possible so you can protect your investment. Seeking legal guidance can help you to clarify your options.

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