Solutions » Small and Medium Business

Cash-squeezed privately held companies are facing another threat in this struggling economy: rising employee fraud.

Employee fraud — from check-forgery schemes to petty-cash theft — tends to rise during tough economic times, when workers are feeling financial pressure in their personal lives, experts say. And small companies are especially vulnerable because they often lack stringent internal controls to prevent fraud. Sometimes, managers at affected companies attribute lost funds to lower sales — never even suspecting foul play. (Wall Street Journal Small Business)

Comments: This is an excellent article highlighting a major problem for small business. It is a problem that is surprisingly common and potentially catastrophic. It has a good breakdown of the frequency of various employee fraud schemes. I have personally heard stories with alarming frequency from business owners. Each said they ‘absolutely trusted’ a person who they subsequently found to be stealing from them. –Allen