Eight Tips to Ward off Employee Theft - Black Enterprise
Black Enterprise Magazine July/August 2018 Issue

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1029_ENT_Sonya Smith Valentine

Smith-Valentine

Since the beginning of the recession not only has fraudulent activity increased, but the amount of money lost to fraud has increased as well.

U.S. businesses lose 7% of annual revenue, equaling $994 billion, to fraud, but small businesses are even more vulnerable, according to a report from the Association of Certified Fraud Examiners.

Small businesses suffered both a greater percentage of frauds (38%) and a higher median loss ($200,000) compared with companies that have 100 to 10,000 employees that only suffered losses between $116,000 and $176,000, according to the report.

Between the recession and loss due to fraud, small business owners are under even more pressure to stay profitable and stay in business. Lawyer, accountant, and identity theft expert Sonya Smith-Valentine lays out eight steps that small business owners should take to keep their assets safe from in-house thieves.

Keep important items locked up.
Make employees who have access to sensitive information lock office doors and file cabinets at the end of the workday. Keep the mailbox locked and limit the keys to the mailbox. Make sure all computers have automatic password protection and instruct users to log off when they step away from their computers. Put passwords on your bank accounts so that only specific people can order new checks.

Check employee references. At a minimum, run a civil and criminal background check on employees, and as your business grows, hire bonded bookkeepers. Even get background information from building management about cleaning crews that have access to your offices.

If an employee has anything to do with money, check their credit report to learn about their debts. “If their credit is really jacked up and they are really hard-pressed for money, they might not be the person you want,” says Smith-Valentine.

Sign your own checks.
If one person is doing all the bookkeeping they might make payouts to companies that you haven’t done business with. They may set up a dummy billing system to make it seem like you received a bill for services and they are just paying the bill. If you sign checks yourself, you are more inclined to pay attention to where the money is going, and employees are also less likely to embezzle, says Smith-Valentine. If the owner isn’t available to sign the checks, then require the signatures of two different employees on checks.

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.


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