Employee fraud can happen to anyone.  Earlier this week a Watchfire Signs employee was convicted of defrauding Watchfire Signs out of $330,000 in 2019.  In 2017 Clear Channel Outdoor took a $10 million charge for accounting fraud in the company’s Chinese subsidiary.  Here are some ways employees can steal from your out of home company.

• An accounts payable employee opens an account in the name of one of your biggest vendors.  Your company’s checks get deposited into the account.  You won’t find out about the fraud until 90 days later when your vendor calls asking why they haven’t been paid.
• An accounts receivable employee with access to your accounting system opens an account with a name similar to your company name.  Checks which clients write to your company get deposited into the employees account and then the employee issues a credit or refund against the account receivable on your books.
• A sales rep outfits a house with a new wood floor by trading discounted advertising space on a billboard and not disclosing the trade on the ad contract.

What can you do to prevent fraud at your out of home company?

• Have your financial statements audited each year.  The CPA firm conducting the audit will directly sample accounts receivables and accounts payables to confirm balances.  It’s extremely difficult to fool a good CPA firm.
• Write checks yourself and originate wires and eft’s yourself.  This works for a small company but may not be feasible for a larger company.
• Review accounts receivable credits, refunds and adjustments for suspicious activity.
• Require each employee to take at least two consecutive weeks off each year.  Frauds fall apart when someone isn’t in the office to keep the fraud covered up.
• Have one employee make deposits and another employee handle the accounting.  Also require two signatures or two approval for a transaction over a certain amount.  It’s hard to hide a fraud whem multiple people are involved.
• Periodically ask to see all of the checks and eft’s which your company writes or originates each month.  An unscrupulous employee will be less likely to try something if they know you occasionally check.
• Know who you hire.  Call references.  Check pictures against ID’s and search online databases to avoid hiring someone with a stolen identity.

Have you ever experienced fraud?  What steps does your out of home company take to prevent fraud.  Let Billboard Insider know using the form below.

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