Student Login 1-800-730-NITA


How to Spot and Stop Employee Fraud

Every business has a right and duty to protect their assets. Any entrepreneur knows their venture is only as good as the people in it. Unfortunately, employee fraud can happen in any workplace.

Workers can disrupt a business through time card fraud, theft, or other types of wrongdoing. As a manager or owner, you should know how to spot and stop employee fraud to protect your business. You should also feel comfortable turning to an experienced Private Investigator to find evidence of wrongdoing.

Common Signs of Employee Fraud

Without overreaching, it’s vital to stay on top of your employees. Good employee habits stem from higher up, so make sure you’re setting a good example and correcting bad behavior as soon as you see it.

Common signs of employee fraud include:

  • Frequent absences
  • Spending excessive amounts of time with vendors
  • Employees living far beyond their means
  • Using petty cash quicker than normal
  • Personal relations with your independent contractors
  • Reluctant about taking vacations
  • Extravagant travel expenses for work
  • Showing excessive private spending
  • Exhibiting financial difficulties
  • Using up office supplies too quickly

    To prevent employee fraud, you need to have the right internal controls and oversight. You also need to make sure that no one is overriding your internal controls. Protect your workplace by conducting anti-fraud training with your employees and installing a fraud reporting mechanism. Run background checks on your employees to reduce the likelihood of hiring people who would steal from you.

    Catching Fraudulent Behavior in a Business

    While the first goal is to prevent fraud from happening, your next goal is to detect fraud when it does occur. Listen to the gossip among your employees. Pay attention to problems that your people are talking about. Make sure that you carefully track petty cash and reconcile it regularly.

    Preventing and Stopping Employee Fraud

    To prevent fraud from taking place, give separate employees financial tasks. You can have one employee write checks, another one sign the check, and a third employee reconcile your bank statements. You can also rotate employees between different departments to prevent stealing. Use data analytics with your payroll records so that you can easily see any irregularities.

    Another way to prevent fraud is by verifying your vendors. Your vendors can also steal from your company, so you need to make sure that they operate a legitimate, reputable business. Start by getting their business name and TIN. Get information like their phone number and a contact person. You should also compare the vendor’s addresses with your employees’ addresses to make sure that they do not have a personal relationship with each other.


Hiring a Private Investigator to Detect Fraud

If you have a hunch that one or more of your employees are committing fraud, you can always count on an experienced Private Investigator to check out your main suspects. Private Investigators are highly-trained to conduct thorough investigations that will allow you to take the necessary disciplinary action.

At the National Investigative Training Academy Inc., (NITA), we provide online courses for anyone looking to become a Private Investigator. We also provide continuing education for Private Investigators seeking to sharpen their skills and expand their knowledge. Contact us to find out how you can become a part of this desirable field today.

Email Us

National Investigative Training Academy Incorporated

Click to Email Us

Connect socially with NITA

Give Us a Call

A flexible, rewarding, empowering career path to become a licensed private investigator or security professional is yours for the taking.


Call Now