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  • How to Protect Yourself from Employee Theft and Fraud

    How to Protect Yourself from Employee Theft and Fraud

    As accountants and advisors we have the privilege of working so closely with our clients that we often find ourselves feeling the same emotions that our business owners feel.  While some of the best feelings are ones when we celebrate successes like new restaurant acquisitions or surpassing sales goals, we also have to endure some of the unhappy emotions such as when we detect fraud in our clients’ restaurants.  

    Recently, we have seen several forms of fraud happening in McDonald’s restaurants and while we caught them right away which stopped them from becoming long-term, costly problems, there is still a level of disappointment and uneasiness that arises when you realize an employee may be stealing from you.  We shared this pain with our clients and wanted to share these stories with you so Owner Operators can learn how to protect themselves against employee theft and fraud.

    Case #1 – Cash

    Just last week a team member from our bill paying department came to me because he noticed that one of our client’s deposits from the day before did not make it to the bank.  This could have been an isolated instance or left unnoticed it could have turned into the beginning of a repeated scheme that unfortunately, is not uncommon.  It is absolutely critical that McDonald’s Owner Operators verify their daily deposits.  Whether you do it internally or you utilize a bill paying service that handles it for you, daily deposits must be verified.  There are too many opportunities on the journey from your cash register to the bank for money to disappear.  In this case, the employee had “borrowed” the money and planned to return it.  To the employee, it didn’t feel like theft.  But whether your employee steals the deposit or holds it for days to use the money and then deposit it later, it is still theft and must be noticed and addressed.

    While cash deposits can be the fastest and easiest way to steal, there are plenty of other ways cash can be stolen from your organization.  From giving out free food and stealing inventory to skimming registers and creating phony pay-outs from petty cash, it’s important that you protect the large sums of money that should be deposited into your bank daily.

    Case #2 – Payroll

    In the past month two different employees from our payroll team came to me due to payroll fraud.  The first was a situation where an Owner Operator had an employee who used the routing number on her payroll check to pay her home utility bill.  The second was an employee who used his cell phone to take a picture of his payroll check and deposited it into his account multiple times through mobile banking.  In both cases, the theft was discovered by properly reconciling the Owner Operator’s payroll account.  At a minimum, payroll accounts should be reconciled monthly and ideally after each payroll distribution.

    No Owner Operator wants to believe that one of their team members could steal from them and we hope it never occurs in your McDonald’s organization.  But it is always better to be safe than sorry.  Be aware of the critical points outlined in the case studies above and be sure you have a team in place that can notice unusual activity immediately.

    Andrew Laufer | 02/26/2019


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