Ask Doug & Polly: Embezzlement occurs in the small business world, but take steps to protect your company from it | Business News
Doug & Polly White
QUESTION: I’m devastated. I have just found that the bookkeeper for my business has been embezzling from me. I’m not sure of the full extent of the loss, but she has been doing it for at least the last couple of years. What should I do?
ANSWER: Sadly, we have seen this many times, so you are not alone.
The U.S. Small Business Administration estimates that 30% of all small business failures are the result of employee theft.
Theft and embezzlement unfortunately are rampant in the small business world.
You need to deal with the situation you have discovered, take steps to make sure that the guilty party can’t do it to someone else, and put procedures in place to ensure you aren’t burned again.
We recommend the following five steps:
- Investigate: These are serious charges. Make sure that you are correct.
Collect evidence to make a solid case. For example, assemble canceled checks and bank and credit card statements. Ensure you know where your money has gone.
- Confront and terminate: Once you have investigated thoroughly enough to be confident you have convincing evidence of embezzlement, confront the employee you suspect.
Have another person you trust, preferably an human resource professional, present for the meeting. You want to have a witness to what is said.
