There are two kinds of warning signs that someone is embezzling: business-level and employee-level. The thing is, embezzlement is sometimes quite difficult to detect. Of course, obvious embezzlement leads to being caught right away, so those who are “dipping into the till” successfully cover their tracks.

Business-Level Signs

The obvious sign of embezzlement is that cash just disappears. For example, you ring a customer and see roughly $1,000 in the cash drawer. Five customers later, there’s only about $500 in the cash drawer. You didn’t take it, but someone else did. Petty cash funds are also ripe for a quick swipe because people don’t generally check petty cash. After all, it’s petty. It pays to keep tabs on all such funds no matter how large or small they are.

Not quite as obvious, but still noticeable, is a situation when companies you do business contact you about payment irregularities. These could be whether you owe them or they owe you. Let’s say that a company owes you for work you did for it. They pay in May, but by July, your company is sending them “pay-up” notices. They produce evidence that they paid, so where did the money they paid go? It’s the same when you owe them. “Joe from accounting” says, “Oh, yeah, I sent them a payment last week,” but that company never received it. Again, where did the money go? The answer is: into someone’s pocket.

Employee-Level Signs

One obvious sign that an employee is embezzling is through ostentatious examples of activities or possessions that are far above that person’s means. As a blatantly egregious example, a mail-room clerk suddenly driving a six-figure sports car or purchasing a mansion would be a huge red flag regarding embezzlement. The examples don’t have to be so obvious, however. The, “I’ve been saving for years for this vacation of a lifetime,” gambit doesn’t hold water if you can put it together with the aforementioned missing payments to or from a company with which you and your company do business.

It’s a much more subtle approach than “the big score” all at once, but employees who do odd or unusual things could be embezzling. “Odd and/or unusual” includes things like routinely working odd hours and seeking to spend great amounts of time alone in the office. So is not taking time off because the person might not want someone else to do the applicable work for fear of the second person finding something. Another warning sign in this category would be someone being possessive of materials, workspace, or communications. The old expression of, “Those with nothing to hide hide nothing,” applies in all situations that fall under this category.

Fortunately, combating embezzlement is usually just a matter of paying attention, which requires effort. It might be easier to write it off if Sue from HR takes $50 from petty cash for whatever reason, but if you do, then Jim from operations might feel emboldened to cook the books and snatch multiple thousands from accounts receivable. Therefore, it pays to be vigilant and seek legal representation when needed.

Disclaimer: “The content in this article is provided for general knowledge. It does not constitute legal advice, and readers should seek advice from qualified legal professionals regarding particular cases or situations.”

Published By: Aize Perez