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100 WAYS: #17 Guard Against Losses from Employee Theft
– May 3, 2010
Recent studies have shown that employee theft has been escalating and up to 75% goes undetected by management. It is estimated that employees steal approximately $55 billion worth of merchandise in this country every year. To small businesses, this can spell failure.
Management should spend time looking for signs in the financial statements that could detect signs of misappropriation. Are your sales up but profits down? Are your accounts receivable more days out than 6 months ago? Are your bad debts (write-offs) increasing? Have you been spending more for maintenance supplies and other non-inventory items? Have your unit costs increased beyond your budgeted figures? Has your overhead increased but sales declined? Are you experiencing a lot of “out of stock”? These are all questions that might raise red flags.
For your employees to respond positively to their loss prevention responsibilities, they must be aware of 1) the rules – exactly what acts are unacceptable 2) management’s commitment to enforcing those rules and 3) why those rules are important.
Walker Coburn
318.429.2109
wcoburn@hmvcpa.com
Walker is a Senior Auditor in our Shreveport office. He received his Bachelor of Administration in Accounting and a Masters of Accountancy from Millsaps College in Jackson, MS. Prior to returning to his hometown of Shreveport and joining Heard, McElroy & Vestal, Walker worked for KPMG in Jackson and Memphis, and more recently as a financial reporting advisor for FedEx Corporate.
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