Business Sphere

A manager of a retail store came to my office the other day, seeking my advice.

The manager was distraught for the reason that it was discovered that some of the funds of the firm have been missing and could no longer be accounted for.

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The cashier was the prime suspect, although fraud audit being conducted by an external auditor was still undergoing.

The external auditor said the store was a victim of funds embezzlement, where the initial findings revealed that a cashier employed by the firm and/or together with her staff, had embezzled the funds.

First, what is embezzlement? To embezzle is to take for personal use money or property that has been given on trust by you, made by an employee (cashier, for example), without your knowledge or permission.

Actually, many business firms are victims of embezzlement.  It results in decrease in capital, funds, and demoralization of the employees who are honest and not in-charge of taking care of company assets.

How to prevent embezzlement? The following are some of the proven methods:

1. Keep records and books of account. By keeping records, all ins and outs of funds and properties are traced and tracked. This way, embezzlement can be prevented from happening as all transactions are recorded.

2. Establish control. Be sure that the person who is responsible for the recording of transactions is not the same person who has physical custody of the asset or management of cash.

3. Background check before hiring. Before hiring, do a background investigation first on the applicants, especially for staff to be assigned to cashiering and recording positions.

4  Spot audit. Conduct on-the-spot and unannounced audit, to check cash and properties and records from time to time.

Contrary to popular claims, embezzlement can be prevented. The rest is up to you.