As a business owner who has put their life and blood into building something special, discovering an embezzlement scheme can feel like an upper cut thrown in a heavyweight fight. It is a personal attack that can leave you dazed by such a breach of trust and violation of personal security. Making matters worse, it is often difficult to reverse the damage and recover what has been taken, leaving an owner without a satisfying resolution. Accordingly, it is important to take action and have a plan in place from the beginning to prevent and catch wrongdoers before too much harm occurs. There are three areas we would recommend focusing on:
1. Preventive Measures. There are a variety of prevention tactics that can be utilized as a business owner and it is important to remember that there is no one-size-fits-all prevention system. Similar to a boxer needing to tailor his fighting style based on his specific opponent, an embezzlement prevention plan needs to be customized and tailored to the environment and operations that the business is working in. Whether it is the chain of command, information verification procedures, employee screening, or a simple accounting review, a prevention plan should address the specific embezzlement risks that exist in the business’s industry and workspace. Further, once the prevention plan is developed, it must be memorialized in the policies and procedures of the business, implemented, enforced and audited. Simply having the plan in writing does not make it effective unless it is utilized and adapted to the changing work environment.
2. Vigilant Detection. Using the developed prevention plan, you must stay vigilant in your review of potential wrongdoers. You have to keep your hands up and protect the head from taking too many hits. Embezzlement often occurs in small amounts that are not readily noticeable, but over time those small amounts can add up and cause serious problems. Additionally, embezzlement tends to be conducted by someone close to you, whom you would not otherwise suspect. Proper preventive plans and detection procedures keep everyone accountable and allow you to trust those around you since you know safeguards are in place.
3. Trusted Advisors. A trainer, cornerman, and cutman all aid a boxer by providing advice, strategy, and first aid to keep their fighter in the match and on the winning path. Surrounding yourself with trusted advisors helps take the burden off you and allows for others to aid in detection. You should have a team of attorneys, accountants, financial advisors, and mentors who can be relied upon, and be a second, third, and fourth set of eyes on operations to aid in stopping embezzlement before it occurs. While you may not be able to catch everything, a trusted team of advisors can assist in developing effective prevention and detection strategies and programs.
If you have any questions or would like to know more about designing an embezzlement prevention and detection program, please schedule a consult at info@byrdadatto.com
