First and foremost, all businesses should put into place policies and procedures designed to help protect the company from financial loss caused by dishonest employees. Examples of these preventive measures include:
- Pre-hiring background checks of prospective employees
- Countersignature requirements for checks
- Reconciliation of bank accounts by someone other than the employee that handles deposits and withdrawals.
- Internal audits/review of all financial records and inventory
- Annual audits using an independent accountant
- Employee Dishonesty Insurance (Fidelity Bond)
Despite a business’s best efforts at prevention, losses can still occur. Incorporating Employee Dishonesty Insurance (Fidelity Bonds) into the company’s risk management practices offers a substantial hedge against financial losses caused by employee theft. These policies are especially important for small businesses, which can be financially devastated by the actions of a single dishonest employee.
