If you run a business, it’s important that you learn how to identify embezzlement. Statistics show that the median employee theft hovers around $294,000—a staggering amount of money for many businesses. Understanding the signs of embezzlement in San Francisco, CA will help you spot any oddities before you’re taken to the cleaners.
Here’s how to identify embezzlement in your business.
What is embezzlement?
Embezzlement is usually a “white collar” crime, but not always. Essentially, someone embezzles when they steal money or assets from your company. This is usually done by someone with access to the finances or other assets, often through forged documents or getting creative with the numbers, as opposed to someone who might shoplift consumer goods from a store.
Embezzlement is typically a state felony, but in some cases it can be a federal crime. The sooner you catch it, the better—while the defendant may be ordered to pay restitution, businesses are rarely repaid in full.
Signs of embezzlement
Here’s a closer look at several common signs of embezzlement. If you witness any of these in your workplace, it’s important to seek legal counsel right away:
- Fake vendor payments: Usually, no one blinks twice at vendor payments, which means it can be a great way for employees to steal money from the company. Sometimes they’ll create vendor payments as a cover for the money they paid themselves.
- Forged checks: If you use a signature stamp for your business checks, beware—some unethical employees might use them as an opportunity to pay themselves. Then all they have to do is alter the financial records to cover it up.
- Overcharging customers: Sometimes thieves will overcharge your customers and pocket the difference. As long as they stick to small amounts, they can potentially get away with this for years because no one notices.
- Padding expense accounts: Having employee expense accounts enables them to do business in a more efficient way. However, if you have untrustworthy hires, they may pad their expense accounts and pocket the difference.
- Using company credit cards for personal purchases: Similarly, some employees will use their company credit cards to make personal purchases. They’ll often create receipts or other documentation that “proves” the expenses were business-related.
- Stealing customer credit card data: If you accept credit cards at your business, watch out for people who might steal your customers’ credit card information. It’s very easy to take that data and use it for personal purchases, opening up lines of credit in someone else’s name and more. If that’s linked to your business, it could ruin your reputation.
- Falsifying overtime: If you notice discrepancies in overtime, it’s worth looking closer. Some employees develop schemes where they clock in and out for each other, or otherwise help themselves to “overtime” payments.
- Selling trade secrets: Corporate espionage sounds like something that only happens in the movies, but if your business has special trade secrets (like secret recipes and formulas), you might find them sold to rival businesses.
If you’ve noticed signs of embezzlement at your San Francisco, CA business, call Medina & Company Consulting, Inc. for help today.