Internal Theft Precautions
Internal theft is a potential problem in any business. It's estimated that 30% of all business failures, nationally, result from employee dishonesty.

• Hiring: Be sure to check references and to conduct background checks on all employees.
• Job Functions: Separate the duties of purchasing, receiving and accounting to reduce the ability of one employee to accomplish a theft.
• Purchasing: Have the purchasing function centralized to better control and supervise it. Control purchase orders by sequentially pre-numbering them, and require supporting documentation for each invoice.
• Receiving: Create and control access to the receiving area. Use pre-numbered receiving forms to record shipments. Count and/or weigh all materials, and compare the results with the shipping documents. Require two people to verify each shipment received.
• Shipping: Have one employee assemble an order and another to check and pack it to reduce theft opportunities and errors. Seal the shipping cartons. Maintain records of stock movements and conduct frequent inventories.
• Key Control: Maintain strict control over who is issued keys and/or access codes. Never leave keys out in the open where they can be "borrowed" and duplicated. Be sure to re-key locks or change access codes when an employee leaves.
• Cash Control: Cashiers should close the register after every transaction and be required to provide receipts to customers. Voided or under rings, and all returns should require verification. Management should conduct surprise cash counts.
• Reward Good Employees: Evaluate employee performance and reward those who do a good job. This inspires honesty. Remember that fairly paid employees aren't likely to be tempted to steal to "make up the difference."