Small business owners have a lot on their plates these days. The pressure that entrepreneurs face to ensure smooth sailing on a daily basis can be overwhelming, and may lead to a slew of negative consequences in other aspects of their lives. Hiring additional personnel is an inevitable and exciting part of a business’s growth; and while the majority of applicants will be trust-worthy and reliable- unfortunately that’s not always the case.
A new report speculates that fraud in the workplace cost Canadian small businesses $3.2 billion in the last twelve months alone. The report, which was published by the Certified General Accountants Association of Canada, estimates that occupational fraud affected as many as 290,000 small – medium sized businesses during this time. While these figures are staggering, they’re not completely out of left field. Times are tough, and employees with hourly wages are more likely to feel the stress of the economic burden than employees who are compensated annually, thus making them more likely to resort to theft in dire financial situations.
How To Avoid It:
The same study found that a whopping 26% of companies had reported at least one instance of internal fraud, with the majority found to be either misappropriation of company assets or cash. This means that small business owners need to be aware of their employee’s access to commodities and be able to monitor inventory and cash management. Providing more substantial training to supervisors is also an efficient means of lowering the risk of internal theft and will help management be able to identify fraudulent behavior before it occurs.