Business is a challenging venture throughout but the start is particularly tough. The business owners need to seek counseling so that they can avoid future problems. Some of the problems can be theft and fraud. These problems can be solved by closely monitoring the processes, systems and employees. The management should intake only trust worthy people or those that have credible backgrounds. Cash handling should be supervised properly too and not given to a single person.
Business Mentoring
Mentoring is a critical job and is important for the one providing it as well as the party seeking it. The business parties seeking mentoring are normally those that are beginners and they wish to avoid problems by seeking expert advice. On the other hand the mentor's credibility and business experience is proved when he offers mentoring and advice. Theft and fraud are two most common issues faced by the starting businesses. The paper discusses what advice can be offered to beginners to avoid theft and fraud in business.
What advice can be offered to beginners to avoid theft and fraud in business?
Mentor
Mentoring is an advisory job and should be backed by proper knowledge and experience. Based on the three decades of business experience, it can be said that fraud and theft are most common in business however only a little more carefulness can help avoid fraud and theft. The two problems are interrelated but committed in different manners. There are some advices given here to guide the new businessmen about how to avoid theft and fraud.
Employee Theft and Fraud in Business
The most common cases of theft and fraud take place at the cash handling sites of a business. Initially it is easier to maintain the records of incoming and outgoing cash because there are only a few people involved and the people in business are highly trusted (Matthews, 2002). However, growing businesses face the challenge since a large amount of cash inflows and outflows are involved. The business can avoid theft in cash by:
i. Assigning job of cash collection to a different person than the person recording the cash. Thus one person will not be solely responsible to handle cash and theft probabilities can be reduced.
ii. The recording of cash can be made real time and computerized. Computerized recording is easier and faster.
iii. The party paying or receiving cash should be given a receipt so that records can be matched if required (Nobel, 2010).
The fraud in business is more likely when new people join the team. Some steps can really help avoid frauds for example:
i. Run a detailed background analysis of the new people joining the team. Make sure that they have never been to jail and were never accused of cheating or fraud (Epstein, 2013).
ii. A family man is more reliable than the independent sole. This is because responsibility makes a person much more disciplined.
iii. Try to induct new people on the basis of referrals. The referrals do not only save the time for background checks but the people also are more responsible and behave honestly when they know that their relationship credibility is at stake.
The internal controls play a big role in controlling theft and frauds. The internal controls mean that the employees should not find gaps in the system to leak finances or information. The business spokesperson to the suppliers and the clients should be a highly trusted team rather than a single person. It should be made sure that one person should not be using the business clients for personal gains or for developing his own side business. The business dealings should be written down and the business representatives should not be let hold a meeting in closed doors or without letting other employees know who is meeting whom.
Glass walls are a big help in reducing the chances of theft and fraud. When things are done behind closed doors, nobody knows what cash and information was involved in the dealing. The management team should also not completely rely on the security cameras. The management should ensure that every person is fairly dealing in the business.
The business should follow the rule that not everyone should be allowed to spend on behalf of the business. The budgets should get approved by the leadership. If everybody can spend on behalf of business for example buying stationary or kitchen items for business, then there will be decentralized expenses that will end the business in frauds and mis-recording of the cash inflows and outflows.
Surprise visits and audits are a great technique to find if everything is going fine in a business. When the visits are planned, the middle or lower management can hide many problems that can grow bigger with time. Thus the business owners should not tell when they are going to check the audits and visit the plants or site (Matthews, 2002). This will teach a lesson to the employees that they should be always fair and prepared for the checks and controls.
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