Embezzlement and Your Business

Embezzlement and Your Business

Do you pay all your employees a living wage? Remember that if we consider the purchasing power/inflation calculations to the first minimum wage established 50 some years ago, the minimum wage should be about $23.00 an hour. A “minimum” wage is not a living wage.

We have more single parents today than 20 years ago and see more travesties in the home with childhood illnesses and syndromes. Television and social media promote the entitlement attitude in addition to the pressures of bringing more money into the home. All of these factors add up to the temptation of embezzlement. The message for you is … are you exposed for embezzlement?

Before we easily say ABSOLUTELY (which I easily could), let us ask ourselves a few questions.

How much access, discretion, and ability do you give your employees to the company checkbook? A better question is… how much access and discretion to check writing, the check book (and of course computer passwords to such) do the banks and the public think you give to your employees? How often do you compare your general ledger to the actual checks [front and back] yourself? Do you know your legal requirements on how soon you must conduct this check? (Ask your “dreaded” lawyer about Uniform Code Article 4 and the banking statues)

It seems crazy, but we are seeing more embezzlement on small and large scales. Some of it is clever, some of it is alarmingly blatant without much covering/hiding effort. They confide in you; they become your “friend”. They introduce you to their children and families so that you will trust them more, endear yourself to them and their family’s plight.

With limited resources in prosecutors’ offices, these offices are less inclined to conduct the forensic accounting required to prosecute these cases. Thus, if you want an employee prosecuted, you may find yourself needing to pay your own accountant (external accountant of course) to prepare the required documentation.

Your takeaway here is again… vigilance. Ask your hated lawyer the embezzlement methods we see in the world these days. (It would be helpful is your lawyer has recent prosecutor/criminal defense experience or ready access to such type of lawyer). Ask your outside accountant about the trends they see. Consult with each of them on how to prevent and watch out for the embezzlement methods.

Sometimes there can be better alternatives than prosecution. Embezzlement is now much too common and brash to ever believe that “it cannot happen to me.”