Common Types of Employee Fraud

Common Types of Employee Fraud

When running a business, your employees are among your biggest assets. Without them, it is virtually impossible to handle various elements crucial to your profits. These employees might, nonetheless, become the biggest cause of your company’s downfall. Several forms of employee fraud exist with different impacts on your company.

A falsified or trumped-up personal injury claim is nonetheless the most common form of fraud most Townsville-based companies will face. Here, your employee might claim compensation for an injury they purport to have incurred on your premises. In other cases, employees make genuine work-related injuries seem more severe than they are often in conjunction with unscrupulous medics. This might seem inconsequential to you because your insurer pays the compensation. Too many claims for insurance payouts, however, increase your premiums and even paint you in poor light among prospective employees and clients. Other than compensation fraud, here are the other forms of employee fraud that have crippled many a business.

Unauthorized Money Transfers, Billing, and Overpayments

These forms of fraud might take multiple types. The employee might, for example, inflate the amounts on your invoices then keep the overpayment or transfer your company’s money into personal accounts. Some workers also set up a false supplier account and bill your company for non-existent services and goods or manipulate the accounts of an authentic vendor and keep the cash.

Asset Misappropriation

This is the use of your business’ assets for something not related to the operation of your company. An employee might, for instance, use a business credit card for personal purchases or the company car for individual trips. Forging company cheques, altering your cheques’ amounts and theft of inventory are also common forms of asset misappropriation. You spend a significant monetary investment in buying company assets. The misuse of machinery, for instance, causes their premature wear and increases their repair expenses.

Payroll Fraud

This often involves the accounting department. Here, the accountant might have a payroll for a non-existent worker through where they direct cash to their account. Others are in cahoots with employers who request payroll advances and do not have the advance deducted from their pay or inflate working hours and request for overtime.

Intellectual Property or Data Theft

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With the considerable business competition, it pays for you to be ahead of your competitors throughout. While there are many legal methods of ensuring you stay a step ahead, some companies opt for intellectual property or data theft to know your plans.

The companies will use some of your employees to know your trade secrets. The employee might sell your company’s contact lists and sensitive data to a competitor to give the latter a competitive advantage in exchange for cash or other benefits.

These forms of employee fraud are not as simple to detect as the above tidbits will have you believe. It is thus essential to have legal measures in place to protect you in case they affect your company. Should you detect fraud, contact your legal team on how to handle it and guarantee it does not change your company’s bottom line. You should also avoid paying compensation even for genuine injuries without your lawyer’s input.