Tips To Avoid Business Theft


Business theft has been one of the causes for a business to shut down. You don’t realize that your most trusted employees for several years suddenly would back fight you and will steal from you.

Some employees are too confident to commit theft as you have built your trust with them and it won’t be obvious at first as they start pocketing little amounts of money or goods from your business. It won’t be too long, usually it will take several months that you will discover the theft being done to you.

We can view several examples of an employee theft being done in a business.

In a construction business, employees commit theft by pocketing a handful of nails when they are about to leave the job site every weekend. By the time the construction project is finished, they have accumulated enough nails to sell for an extra income.

In an office, your messenger can commit theft too if he receives a tip for delivering your landlord’s monthly check. Why should he get a tip for doing a job that he is already being paid for? Employees in the purchasing department of a company commit another most common instance of a theft by getting “kickbacks”. Usually, these employees will receive “kickbacks” from your suppliers to encourage him or her to order more supplies from that particular supplier.

Another serious example of theft that I heard recently reported in news is that an insurance broker deposited her client’s insurance dividends to his bank account so he can withdraw them. How did he do it? He presented fake identification cards to the bank to open a new account under his client’s name. He deposited the check under his client’s name to his fictitious bank account to make him able to withdraw them. It was long after his client discovered the theft incident.

What can be done to prevent theft? As they say, prevention is the best cure; here are some of the tips to avoid theft in a business:

Tip 1: Screen your prospective employees well. Do a background check to avoid theft. Require documents such as NBI Clearance, recommendations from former employees or teachers in college, and verify your employees’ indicated addresses.

Tip 2: Spread the tasks evenly and do a check and double-check system. Don’t require only one employee most especially in handling the cash and inventory handling, as these are the tasks most conducive to theft. Put employee “A” in charge of inventory management, employee “B” in charge of the accounts receivables, employee “C” in charge of collection, and employee “D” in charge of depositing client payments to the bank. Always be in an active look out on the money coming in, money coming out, and inventory.

Tip 3: Do surprise checks and audits. Make surprise checks and audits to employees work as these will provide “fear” of uncertainty among them and will avoid theft.

Tip 4: There is a saying that theft is a crime of opportunity. If you give your employees the chance to steal from you, then they would probably do it. In order to avoid this, put a lock in your drawer or cabinet. Or you can also put a closed circuit camera in front of your, say, cashier or to your inventories to watch over them.

Tip 5: Be careful with your personal and business checkbooks. Checkbooks have been a source of theft. Make sure to keep your checks in a very safe place. Always record the check numbers of your issued checks and verify if there are no missing blank checks in your checkbook. Usually, theft is being done by employees who tear a page of you checkbook in the middle, forge your signature, and make a check payable to their name. If possible, tear off your cancelled checks into pieces so that they cannot be used for theft.

Tip 6: If possible, do not pay cash. Pay your expenses in checks especially when it involves huge amounts. Cash is more common to theft than a check. Employees can easily tell that they became a victim of a hold up while carrying the cash. This can be supplemented by having someone punch him in the face to have a black eye to make it look more real to you.

Tip 7: Put a number to all your accounting and record documents. Pre-number your receipts and sales invoice, vouchers, journals, etc. to make sure that they are used in a sequence. A sales invoice from a booklet used eight months ago can be a source of theft if it was used in the current month to record a new sale.

Tip 8: Business with huge inventory. For business with a large inventory, always start and end your day by doing a thorough inventory count. Know how many were sold and unsold for the day and tally your cash box with your sales. If there is a shortage, then make the cashier liable by deducting the shortage to her salary. In this case, she will be more responsible in her job.

Tip 9: For business with huge cash transaction such as a gasoline station or a grocery store, make sure to make several bank deposits in several banks per day so that in case a hold up happens, not much will be lost. Make sure also not to make a regular deposit habit like every 9am or 3pm to make sure that thieves will not put an eye on you.

Tip 10: For restaurants and convenience business stores that are in 24-hour operation, make sure your store is very well lighted at night. A well-lighted store that is very visible to passers by will discourage thieves to make a theft in your business.

Tip 11: Secure a theft insurance policy for your business. There are insurance policies offering to cover the assets lost in case of theft. If your business is capital and inventory intensive, I guess you should try to get a theft insurance policy.

So there you are the tips to avoid theft in your business. I hope these tips can be useful in your business to avoid a possible bankruptcy especially nowadays that we are in a striving economy.

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Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

2 responses on “Tips To Avoid Business Theft

  1. Great tips. I read an article that had some other good tips on a similar subject titled “Employee Theft: What You Don’t Know CAN Hurt You” – http://www.allbusiness.com/company-activities-management/company-structures-ownership/11690672-1.html

    Good read. And looking further into it, I found a civil recovery service that I could afford – http://www.palmerweb.com.

    These tough economic times, I need to keep my hands on as much profit as possible.

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