Brazen Fraud and Theft, Part 1 – Cash Crimes 

by | Feb 27, 2024

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Over the years, we’ve had the unfortunate experience of discovering that several of our clients were victims of fraud or theft. (Gasp!) This sad but true situation is a reality for most business owners. We are not talking about the dramatic, masked burglar scenes from the movies; instead, an employee quietly removing cash from the register while no one’s looking or someone pretending to be calling from your bank are the more common crimes. But, make no mistake, it can be just as devastating.  

In this new 3-part series, we’ll explore various forms of fraud and theft faced by businesses; and talk about ways you can thwart thieves looking to drain your bank account. From blatant cash crimes to silent threats of check fraud and embezzlement, we’ve seen it all. Through these posts, we hope to arm you with practical tips for prevention and guidance on monitoring your financial reports to detect and stop theft in its tracks.  

Follow along to ensure you’re well-prepared to defend against brazen fraud and theft at your business.  

Cash crimes 

Our first dive into the underbelly of financial crimes is into cold, hard cash.  

If you accept cash payments, there is a very real chance you have experienced theft. We’ve seen employee theft with most of our clients who handle cash, and it can take many forms.  

Cash crimes can be the trusted employee skimming from the cash register or the long-time employee taking cash to the bank for deposit — but the cash never makes it there.  

In three different cases, we’ve seen employees taking money directly from the cash register or cash box when they thought no one was looking! Talk about brazen theft. 

It’s taken many years for me to understand just how common employee theft is. I would often see clues, but my first instinct was never to point a finger. Generally, I would inquire – what is actually happening here? I’d contact my clients to indicate I couldn’t match up cash receipts with deposits. Had they taken some cash out of the drawer to pay for supplies, despite recommendations to deposit cash directly to their bank. 

As we’ve uncovered the theft of hundreds of thousands of dollars, I now warn all businesses about this very likely possibility. I want all companies to know how to guard against theft. These acts of theft don’t just affect the company’s bottom line; they shake the foundation of trust within an organization.  

Preventing cash crimes 

The most important thing you can do is to have someone closely tracking your money. If you aren’t closely reviewing your reports, you leave the door open for ongoing theft. Regular, careful bookkeeping can nip this in the bud. With a dedicated professional carefully tracking your finances, red flags can be identified promptly, helping you to stop potential theft before it balloons into a significant financial problem.  

Here are some other safeguarding measures you and your financial partners can implement to identify and stop employee theft.  

  • Vigilantly monitor balances on your balance sheet – especially the one representing Cash on Hand.  
  • Keep a log and categorize expenses paid with cash.  
  • Implement a detailed process for handling cash, and record daily opening and closing balances in your cash drawer. 
  • If you keep a petty cash box, keep it locked and have a written process for those with access. 
  • Minimize the amount of cash on hand and make weekly cash deposits to your bank. 
  • Keep an eye out for employees who actively avoid your financial partners or dodge questions about purchases.  
  • Consider installing a camera pointed at the cash register (and inform your employees about it, especially when required by law).  

We know you want to show your team you trust them, but it is entirely appropriate to put in some safeguards to deter theft. Again, if you accept cash payments, there is a high probability you will be the victim of theft. It’s absolutely reasonable to mandate cash deposits travel straight from the store safely to the bank and require a deposit receipt if anyone other than the owner is making the deposit. Trust is vital but protecting you and your company is equally important.  

If you or your team identify missing funds – act fast! A lot of money can disappear quickly, and theft can become more rampant if left unchecked. You may need to involve law enforcement and take appropriate disciplinary action. You’ll also want to review and strengthen processes to prevent future theft.  

While brazen theft can be a killer for small and medium businesses, companies can protect themselves from this common threat with vigilance, written policies and the right financial partnership.  

If you want to reinforce your cash handling procedures and stay ahead of potential theft and fraud, contact Fritz Financial Solutions. We’re here to review your strategies and keep you in the loop on all your accounts, helping you spot any suspicious activity before it becomes a major headache. Contact us today to get started, and stay tuned for the next post in our series on phishing and check fraud! 

Traditional forecasting can be a losing endeavor  

If you're a business owner, I bet you’ve been told you should be forecasting. This traditional advice suggests that there is a specific model to follow or a manual to use. However, as you and I both know, the reality is that when life gets in the way, your forecasting...

Understanding Financial Accountability  

"I'm not here to give you the good news."  I say that phrase to clients much more often than you might think. Because I ultimately want to celebrate their business's success with them, I’m there to tell them the actual state of their company's finances and guide...

Trust and Commitment in a Remote Team 

A couple of months ago, I made my first overseas trek since 2017 – not for vacation – but to meet with the rest of the Fritz Financial Solutions team of accountants in the Philippines. It was important to me to show these women the time and attention needed to...

Client Spotlight: Andrea Freidman 

As a business owner, one of the most significant challenges to overcome is work-life balance. This dilemma has only been exacerbated over the last several years and forced many "traditional" industries, such as the legal profession, to change their ways. Long before...

MEET THE TEAM: Joy mercado, Staff Accountant 

Joy Mercado joined Fritz Financial Solutions just over six months ago after completing an accelerator program with TOA Global, our offshore recruiting partner specializing in the accounting industry. Joy has quickly become an invaluable team member doing highly...

Client Spotlight: Isaac Crawford  

Isaac Crawford is a ray of sunshine who went after his dreams and came out on top when he started his own hair salon. He has been in the hair industry for almost 15 years and has serviced hundreds of clients in Chicago. An inspiration to entrepreneurs, we are excited...

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