How to Cease Employee Theft
If you run a business that does a large volume of cash transactions, you’re at a heightened risk of employee fraud. Good hiring practices can cut fraud, but you never know when you’ll make a hiring mistake or a good employee will go bad. Implementing strong internal controls can help you deter and detect cash skimming.
Implement Inventory & Keep Current
Cash theft is especially problematic in businesses that don’t keep track of inventory or in businesses with loose inventory controls such as food or bar service. However, you do not need to accept this as a cost of doing business.
Make sure that you have a point-of-sale system that will keep track of inventory. Next step is to make sure only an admin or manager has access/permission to edit/account for inventory. You will also need to make sure to update inventory items when receiving shipments, adding new products, and even recording when an item is unpurchasable. Set standardized portions for all food items and require that employees strictly adhere to them. Teach bartenders to pour according to specific measurements and make a public display of regular inventory.
Your point of sale system should be set up to record the quantity of each individual item sold. Don’t use a generic system where employees only enter prices. You can then compare the purchased inventory with your sales records and actual inventory to see if all inventory is accounted for. If not, you can investigate the cause whether it’s waste or theft.
Assign Each Cashier Their Own Till
Assigning each cashier their own till or cash drawer will allow you to monitor each cashier’s cash drawer and will also pinpoint which employee is short on cash. When multiple hands are involved, it gets harder to find the real culprit who stole from you.
Assigning a drawer to each employee will also alleviate the constant headaches of shift transfers. Corrupt employees will always try to shift the cash shortage blame onto the next employee. Printing a cash drawer report at the end of shift will allow each employee to count their till and know when they are short or over in cash.
Review Reports As Often As Necessary
Make sure to always review your reports daily to identify and break down returns, voids, refunds, discounts, no sales, and other unusual transactions by time, day, shift and employee. Unusual transaction patterns could be a sign of employee theft, or you could have a particularly fussy group of customers coming in on a certain day.
To determine the cause, rotate your employees through different shifts to see if the pattern follows a particular employee or shift. Sharing these metrics with employees can help provide a further deterrent to theft as they’ll know you’re monitoring for unusual activity. As always, the greater your transparency, the greater the likelihood your employees stay on track and avoid illegal acts.
Implement a POS system with robust employee transaction reporting features is essential for businesses aiming to streamline operations, enhance transparency, and optimize financial management. A POS system serves as the central hub for processing transactions, managing inventory, and tracking sales, while employee transaction reporting features add another layer of accountability and insight into daily operations.
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