Growing businesses have an increasing risk of embezzlement and financial fraud within their ranks as the company continues to expand its reach and hires more and more personnel. Because it can take many forms, such embezzlement can be difficult to spot, unfortunately. Today, we at Advanced Private Investigator & Security of Miami, FL would like to share a few of the places that employee-related fraud can occur to help your company find problems that may be eating into profit.
Company Fraud & Embezzlement Examples
1) Accounting Fraud. Since it’s the place where money trails are made and numbers are crunched, accounting is a risk point. For example, a payroll employee could change their own salary, cut a paycheck, and then change their salary back. This could be hard for others to identify since payroll is often overseen through reports rather than by verifying checks. Within accounting, potential weak spots are plentiful. Cash may be received by accounts receivable that someone could pocket. To over-bill or even double bill, accounts payable employees may work with vendors. To pay themselves or a friend, general ledger technicians can make fraudulent transactions.
2) Payroll Fraud. Outside the accounting department, payroll fraud can also occur outside. An employee may have another employee clock in for them even though they are not working for instance. When reporting time worked, someone may report excess overtime or pad their hours. Not only is payroll fraud very common, but it can go unnoticed for a long time. An extra hour of overtime per week may not catch anyone’s eye after all. Especially if other employees see the fraud working for someone and decide to try it themselves, it will add up to serious dollars over time.
3) Inventory Fraud. A risk that someone will pilfer it is probable any time there is a cache of inventory. The most valuable inventory, such as technical parts or precious metal components is usually the focus of most companies. They may be harder to steal or harder to make money from. Someone might target items that are unprotected, such as waste to be recycled or even office supplies that could be returned for a cash refund, instead.
4) Cash Chain Fraud. Because it’s not easily tracked, cash is easily stolen. Other risk points are harder to see while it’s obvious in areas like cash registers. Petty cash in various departments; employees that move, count, or deposit cash; employees given cash to do a transaction, like arrange the company picnic; as well as cash-like instruments like company credit cards are all vulnerable.
5) Fraud in Hiring or Contracting. Bypassing procedures to hire a friend or relative is the most common form of hiring cause fraud. In order to hire their brother-in-law’s computer repair company, a department manager excludes qualified candidates for example. Especially if they didn’t follow procedures, if they hired this person based on their connection, the company has been defrauded of fair, unbiased competition and the best candidates.
6) Management Fraud. Trusted managers could be committing fraudulent acts against the company, which can be a shock to many employers. because they operate with much greater reach and less oversight, management-level employees can be a bigger risk than usual. From turning in fraudulent invoices from a fake company to funneling corporate money to their home improvement project, a manager could do anything.
Private Investigator & Security Services in Greater Miami, Sunny Isles, Fort Lauderdale, Boca Raton, Weston, Plantation City & Miami Gardens Florida
If you suspect fraud in your business, call in the professionals of Advanced Private Investigator & Security of Miami, FL for quality services and we will find the culprit long with solid proof if fraud is confirmed.
