In a newsletter, I showed how bad software design was, to some extent, responsible for a major employee theft, and I offered a plan that might have saved this shop a lot of money. All passwords should be changed regularly and kept secret.
Although for this newsletter, I received a lot of praise from people and one criticism. Many did offer their own personal experience and knowledge of similar thefts. Some are not small. For example, one competitor of mine recently released information that he knew of a case of $250,000 stolen by an employee over almost three years.
It may seem to be mind blowing, but sizeable theft can occur even in very small businesses. If you think about it, the stock and turnover per employee in a large store is similar to a SMB store.
I was also asked if there was something I could advise people on what they can do to avoid this.
Well, I can tell you in my experience the biggest case of loss occurs when people have products or services that are not integrated into their point-of-sale system. Once integrated there is some checks. For example, one of my clients had $200,000 go missing from an epay/touch system that was not integrated into their point-of-sale system. The sales were going through of telco products, but they had no idea that no money was coming in. They never checked to see that the epay/touch statements did not match what was going through the till. An accountant who we worked closely with to help our client reported to me in all my experience, "I have never seen anything like it." I told him "I have."
Here is another example, a client had a computer for their delivery system and a cash register. He lost about $25,000 plus. One employee discovered that she could issue receipts from the computer system and not ring it up in the till. As such many cash transactions to do with delivery, that she processed she kept. Now what is really amazing was that this girl, was only working for them until she could get a job in the police force as she wanted to become a policeman.
Sometimes it happens even without intent. About 1% of a store's turnover went missing because of keying errors in the EFTpos in one shop. When the shop went to an integrated tyro, suddenly they saw it. They told me they picked up about a $400 a month, pure profit.
Besides other benefits such as saving time, integrated systems can reduce theft, sometimes dramatically.
