10 Signs of Employee Embezzlement

There are a number of warning signs of embezzlement. Some general indicators may include:

1.     Missing Documents

2.     Delayed bank deposits

3.     Holes in accounting records

4.     A large drop in profits

5.     A jump in business with one particular customer

6.     Customers complaining about double billing

7.     Repeated duplicate payments

8.     Numerous outstanding checks or bills

9.     Disparity between accounts payable and receivable

10.   Disappearance of petty cash

Other employee warning signs that can indicate trouble:

1.     Goes out of the way to work overtime

2.     Spending more lavishly than salary might indicate

3.     Has the same address as a vendor

Detection of Embezzlement by Your Employees

 business often owners rely on their bookkeepers to take care of financial matters. This is especially so where restaurant owners are chefs in the kitchen, leaving them less time to focus on the administrative aspects of the business. However, the business owner is legally responsible for oversight of all aspects of the business, especially financial matters. The sad news is that much of the problem is caused by family members who are trusted and not subject to any checks and balances in the accounting system.

A periodic review of the business books and records can reveal signs of trouble before they bankrupt your business. There are a number of warning signs of employee or partner embezzlement. Some general indicators may include:

  • Missing Documents
  • Delayed bank deposits
  • Holes in accounting records
  • A large drop in profits
  • A jump in business with one particular customer
  • Customers complaining about double billing
  • Repeated duplicate payments
  • Numerous outstanding checks or bills
  • Disparity between accounts payable and receivable
  • Disappearance of petty cash

Other employee warning signs:

  • The employee goes out of the way to work overtime
  • The employee spending more lavishly than salary might indicate
  • The employee has the same address as a vendor

If you suspect embezzlement, you should consult an accountant to confirm your findings. You may also consult your attorney for your options to address any malfeasance  and your insurance agent to identify any coverage you may have for the losses.