Employee fraud can seriously affect any business; the construction industry is no exception. We have discussed this numerous times in our podcasts and blog posts. Unfortunately, we still get calls from construction business owners who unknowingly become victims of this financial nightmare. That is why it is important to revisit this topic and emphasize the need to be proactive and vigilant so it doesn't happen to you.
Identifying warning signs of potential employee fraud is crucial for maintaining your company's financial health and integrity. Unsurprisingly, the highest-risk employees for fraud have trusted roles in financial services: Accounts Payable, Accounts Receivable, accounting, and bookkeeping.
To commit fraud, or in this case, embezzlement, an employee must have both access and opportunity—that is, access to funds, banking records, and accounting data. The ideal situation is for someone entrusted with multiple roles who can cut and sign checks, process accounts payable, and handle bank reconciliations.
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Topics:
Bookkeeper Embezzlement,
Embezzlement,
Contractor Bookkeeper Embezzlement,
Construction Bookkeeper Embezzlement,
Employee Fraud,
Employee Theft,
financial fraud
Recent employee theft statistics are increasing, and small business owners are more vulnerable to the problem. The most common embezzlement methods include billing fraud, cash on hand, and check tampering.
You may not know how employees can steal from you as a construction business owner. Some standard methods include:
- redirecting company checks to personal accounts and altering entries to cover up the theft
- undercounting change to customers and keeping the balance
- seeking reimbursement for non-business related expenses or
- pocketing inventory or supplies.
Just as you can't be 100% secure all the time, there is no way to eliminate 100% of the embezzlement in your contracting company. However, you can limit your losses and avoid most of them with suitable preventative measures.
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Topics:
Bookkeeper Embezzlement,
Embezzlement,
Contractor Bookkeeper Embezzlement,
Construction Bookkeeper Embezzlement,
bookkeeper theft,
Employee Theft
