When people run their own company, they may do their best to use good business practices. However, employees may not always follow these ethics and may commit financial fraud.
There are several signs that an employee is committing fraud.
According to Business News Daily, accounts that do not work out are a sign of fraud. Business owners may review their accounts receivable and realize they cannot account for some of the expenses. The expenses may also seem higher than usual.
Additionally, the payroll may be inconsistent. Employers may notice that employees entered a certain time on the timesheet. However, the employee may not have arrived that early or stayed that late. This may indicate that an employee is trying to increase the paycheck illegally.
According to the Journal of Accountancy, employees who engage in financial fraud may offer kickbacks to some vendors. Business owners may receive invoices that are higher than usual while the size of the order remains the same. This may indicate that an employee has worked out a deal with a vendor and receives payment in return.
Change in lifestyle
Sometimes, employees may begin to look like their financial circumstances have changed. They may begin to drive nicer vehicles or come to work wearing more high-end clothing. This change may seem sudden. By itself, this may not necessarily be a sign of fraud. However, business owners should be wary if they notice problems with their accounts around the same time.
When employees commit financial fraud, business owners may become implicated. This can damage their reputation and some business owners may even face fraud charges.