7 Best Ways on How to Catch an Embezzler

When you operate a business, you need to hire a team of employees to help run it. These are people with specific skill sets that are dedicated to building your company and happy with their compensation. The last thing you need to worry about is one of your employees stealing from you.

Unfortunately, embezzlement is a fairly common occurrence. This is where an employee that is in a position of trust steals from their employer. They can steal money directly or take other assets but either way, it is theft.

What can you do if you think someone on your staff is stealing? Here are 7 ways on how to catch an embezzler:

1. Check company records

Financial records are usually kept by your accountant and that a good way on how to catch an embezzler. They take care of the books and keep records of payables and receivables. You should inspect these books regularly to make sure there are no red flags. Look for signs like multiple payments going to the same address or same person. This could be proof of fraudulent accounting.

If the records are disorganized and difficult to understand or there are missing documents, that may be on purpose to make it hard to spot irregularities. Corporate investigation services can help to keep your records straight.

2. Watch employees

If there is a sudden change in an employee’s standard of living, you may have an embezzler on your hands. You know how much people are being paid so it’s easy to recognize when someone is spending way beyond their means.

An employee’s behaviour may also send signals that they are stealing. If they used to be easygoing and open, then suddenly appear nervous and keep to themselves, you need to check into their work activity. They may become defensive when asked about missing documents and even blame others to hide their tracks.

What they do outside of work may indicate embezzlement too. If they start gambling heavily or become excessive partiers they could be using stolen funds for these activities. Make sure to monitor them without doing anything illegal.

3. Pay attention to checking accounts

There are some scams that dishonest employees can do if they are in a position to write and deposit checks. Look over all the checks in the monthly statements to make sure everything checks out. Scams like Lapping and Cheque Kiting are common embezzler techniques as well as bogus refunds and duplicate checks.

4. Company credit cards

This one is pretty self-explanatory. Some employees are given company credit cards for purchases related to the business. These are usually management staff or key employees. They can use the company card to make purchases for themselves. They may also get an unauthorized card given to them without your knowledge.

5. Customer and vendor complaints

The person you have in charge of paying vendors and collecting from customers can use this financial power to embezzle from you. They can record payments going out but write cheques to themselves. If you start getting complaints from vendors that you are not paying your accounts but the money has been going out, you need to find where it is.

The same holds true for customer payments. If some customers are usually late or are in arrears, the payment may have come in and was taken but the embezzler. They record that the payment is unpaid but pocket the funds.

6. Missing cash

Some businesses have multiple cash registers and keep petty cash for smaller purchases. A business may even have money stored in a safe with a few employees granted access to it. If you are noticing registers not balancing or petty cash is missing,  someone in the business is taking it. This is another horrible example of embezzlement and you need to keep a daily count of all cash held in the office or store.

7. Unusual work behaviour

Most employees come to work for their regular shift, clock out, and go home. If you suspect someone is embezzling from the company, you may find the person based on their work habits. Employees that want to steal may ask to work late, start early, or come in on holidays. They also prefer to work alone and never take days off. They don’t want other employees to uncover their schemes while they are away and when they are alone at work it is less risky for them to steal. Pay attention to any employee making these work demands.

Nobody wants to have a staff member steal from the company. You have worked hard to build your business and hired staff that you trust. If you suspect any form of stealing from your company, you need to catch the embezzler and report them to the police. Start by investigating where the money is missing and take notes. Enlist a staff member you trust if you need help.

Once you have evidence contact a lawyer and speak with the police. You may not be able to recover stolen money but you can stop the ongoing embezzlement and show the rest of your staff that you take theft seriously.