TYPES of EMBEZZLEMENT

With the availability of high-tech copiers and computers, the dishonest are discovering more ways to get rich quick, especially during the holiday season, and to get rich off the sweat of someone else's brow. Here are some of the most common schemes you should be on the lookout for:

NON-REGISTER SALES

This happens when a customer is in a hurry and doesn't want a receipt. The cashier simply tells the customer the total and accepts the money. The cashier either records a no-sale or records a lesser amount and pockets the difference.

PREVENTION

Do not allow no-sales to take place. Personally sign all void receipts if you are on the premises, or audit them and ask questions as soon as possible. Other options include the use of mystery shoppers (shoppers hired by the company to oversee sales transactions and spot fraud. You can also encourage customers to ask for a receipt by offering a cash bonus if they are not offered one.

CHECK KITING

To do this, the employee must have access to two checking accounts: either your business account and the employee's personal account, two of your business accounts at different banks, or your business account and a business account of an accomplice. It works because of float time.

First, money is taken out of one account-say, the general expenses account-and deposited into another account, such as payroll. A check is then drawn on the payroll account and deposited in the general expenses account to cover the earlier deposit. Each time the amount is increased until more and more is floated between accounts. This can go on for quite some time if you have authorized an employee to write checks and make deposits.

PREVENTION

Keep these responsibilities separate, check your bank statement carefully, and audit your checkbook often.

LAPPING

This is done when an employee receives money for a customer's account and pockets it. Then when another customer account is paid, part of the money is taken and the rest is applied to cover the first account. When a third comes in, more is skimmed to cover the second.

For this to go on for any length of time, the employee must keep accurate and detailed records of what is being put where. Be wary of those who never miss a day, take no vacation, and never leave the premises for lunch.

PREVENTION

Spot checks, occasionally doing the accounting yourself, separating responsibilities, and handling customer complaints personally are all ways to keep this from happening.

COMPUTER SCHEMES

All computer-related embezzlement is not complex. An employee can easily input false data, create bogus accounts, manipulate numbers, and duplicate printouts.

PREVENTION

Once again, separation of responsibilities can control what goes into and what comes out of your computer. Limit use of the accounting functions on the computer to essential personnel. Know what software is on your system and prohibit installation of outside programs. Learn how to use your computer and don't rely on someone else to show you.