Intermountain PI Podcast | Ep. 18 | October 8, 2019 | 6 Private Investigator Tips to Prevent Fraud in Business

Years ago I worked for a guy whose form of case management was writing notes on the back of manilla folders.  In fact, he once told me, “Go do surveillance on that lady.  You know, the one with the red car.”  He became visibly upset when I couldn’t remember who he was talking about.  

Now, I know we’re not splitting the atom here, but being a private investigator is complicated.  No two cases are alike.  Therefore, you need a case management platform that’s flexible and that grows with your business.  With this in mind, I’ll be right back with a special offer from our new sponsor. 

I’m pleased to announce that the Intermountain PI Podcast is now sponsored by Trackops, a powerful investigation management platform used by companies of all sizes and in countries all around the world. With features designed for managing every aspect of a PI agency, Trackops has the tools to streamline your operation from intake to invoice.  How do I know?  Because I use Trackops and it’s made all the difference in my business.

So, right now I have a special offer for you.  Try Trackops free for 15 days, right now by signing up at trackops.com.  By the way, if you mention this ad…that you heard about Trackops on the Intermountain PI Podcast, you’re going to get 10% off of your base subscription price.  Trackops is case management made easy!

PREVENTING FRAUD IN SMALL BUSINESS

Let’s talk about 6 private investigator tips to prevent fraud in business. First, let’s consider a few statistics. When it comes to theft in small businesses, employees are responsible about 58% of the time.  Shoplifters account for about 35%.  In other words, employees are more likely to steal from you than customers.  In fact, a recent study suggested that 75% of employees have stolen from their employer at least once.  Men are more likely to steal than woman.  Moreover, it takes about two years before a fraud is detected.  

Whether your employee is a high school graduate or a college graduate doesn’t seem to matter.  They both account for about 34% of thefts in the workplace.  On the other hand, employees with graduate degrees only account for 11% of thefts but they typically steal five times more.  By the way, these statistics come from the Association of Certified Fraud Examiners.

This begs the question why?  Why do employees steal?  Lots of reason, really.  Greed, for starters.  Then there’s financial problems and unexpected bills.  Of course, addictions, such as drugs, gambling and alcohol can be a factor.  Sometimes they just steal because of opportunity.  For example, due to weak financial controls or bad cash management procedures.

In the final analysis, your employees can be your greatest asset or your greatest sources of risk.  With this in mind, consider these 6 private investigator tips to prevent fraud in business 

1. PRE-EMPLOYMENT BACKGROUND CHECK

A background check looks at criminal history, sex offender status, credit report, driving records, education, previous jobs and references.  A background check can cost anywhere from $30 to $300 or more depending on what you want to check.  It won’t stop someone from stealing, but it may stop you from hiring a bad risk.

2. ACCOUNTING AND BOOKKEEPING

Another key point, don’t allow the same employee to do accounts receivable and accounts payable.  In fact, don’t allow the same employee to do the accounting and bookkeeping.  Furthermore, employees who handle company finances shouldn’t operate in isolation.  Institute a regular, unplanned audit by a third party.  Additionally, make sure the same employee doesn’t open the mail and post the checks.  Again, those tasks should be done by two different employees.  Finally,