When managing your business, a system of checks and balances is needed to alert you to financial irregularities. No business owner wants to think that a trusted employee is stealing or causing losses in their company, but it is necessary to safeguard against these types of losses. If you notice financial irregularities in your business, it is important to get to the source of the issue as soon as possible. Here are some steps to take to protect your business and find the cause of the change in finances.
Pinpointing the Source of Financial Irregularities
There are many ways to lose money in your business, from internal issues to vendor or outside theft. Pinpointing the source is the first step to stopping the loss. It can be inventory, accounts receivable or wage related – narrowing down where the hemorrhaging is coming from is the first step. Auditing your books and finding any irregularities can get your investigation started in the right direction. If you are not sure where to start, consider the following areas:
- Employee misuse of time or assets
- Inventory shortages
- Changes in payroll
- Accounts receivable
- Changes in expenditures
These are a few areas that can commonly cause financial irregularities in a business. Employees misusing their time or personal use of company assets can be difficult to ascertain, but are a common cause of internal loss. Inventory loss is another major issue; auditing your inventory control procedures can alert you to an issue with a vendor, theft or other causes of loss.
Pursue an External Investigation
Often, trying to find the source of your financial irregularity from the inside can be time-consuming and unfruitful. If the culprit is a manager or employee, you may alert them to start covering their tracks. Another option is to hire a corporate investigator that has the experience and expertise to uncover the source of the financial loss in your business. This can be especially beneficial if it is an internal issue; outside investigators will not be biased or overlook employees due to their personal relationship with them. Unfortunately, many frauds and internal losses are perpetrated by trusted employees that seem above investigation.
At Rapid Results Investigation Services, we specialize in helping our corporate and small business clients get to the bottom of financial irregularities and other loss prevention issues. Call our team to begin a thorough external investigation to stop losses and keep your business profitable.