5 Best Ways To Prevent Employee Theft and Fraud

proving employee theft singapore

5 Best Ways To Prevent Employee Theft and Fraud

Employee theft and fraud is one of the biggest headaches that plague business owners in Singapore. This is an especially significant concern for cash-heavy businesses like retail or Food and Beverage establishments. The statistics are not encouraging:

  1. Employees are up to 15 times more likely to steal than a non-employee.
  2. 1 in 5 businesses in Singapore have experienced some form of economic crime.
  3. Employee theft is the number 1 economic crime suffered by businesses in Singapore. It accounts for 65% of all crime experienced by business owners.
  4. Procurement fraud accounts for 35% of all economic crime experienced by businesses in Singapore.

Employee theft and fraud can materialize in a myriad of ways:

  1. Physical theft
  2. Embezzlement of funds
  3. Embezzlement of inventory
  4. Fraudulent charges (e.g. fake procurement orders, fake expense bills)
  5. Stealing valuable company information (e.g. customer databases, intellectual property, trade secrets, etc.)

We’ve compiled a list of 5 helpful tips that you can implement to prevent employee theft at your business:

#1. Install CCTVs

Make sure you install CCTVs in your business – particularly if you have cash registers – to ensure that you have a permanent record of what your employees have done during business hours. Make sure the CCTVs are directed at the cash register. If you sell goods, make sure that the CCTVs can capture all the areas where goods are sold. Don’t forget about the backrooms where you store inventory – make sure you have cameras there too.

The issue here is not about trust, but verifiability. For employees who have demonstrated themselves to be honest, you can certainly afford them the trust they deserve. However, you need to ensure that you have a means to verify their claims, no matter how trustworthy they appear. CCTVs are an affordable and highly effective first-step to prevent employee theft.

#2. Separate purchasing and payment roles

Make sure that you don’t have the same employee(s) doing the purchasing of goods/services, and at the same time handling payment for those goods/services. If you do, that’s a financial and corporate governance disaster waiting to happen! Employees who have both purchasing and payment powers can easily abuse their authority.

Here’s how potential fraud might occur:

Step 1: Employee submits a purchase order for goods/services to a fake company using. In reality, the payment details (e.g. bank account) are controlled by the deviant employee.

Step 2: The fake company “provides” the goods/services. In many cases, nothing is actually ever done.

Step 3: Employee approves payment for fake order. The money goes into their bank account.

Step 4: Unless you conduct a thorough investigation, the above purchases and payments will not raise immediate red flags during financial audits. It will appear that goods/services had actually been provided, with the proper accompanying invoices.

Such fraud is extremely common. If you don’t want your company to be taken advantage of by your own staff, make sure you have two different people (or more) handling purchases and payments. Purchases should be reviewed by a supervisor (or yourself, even), to gauge their usefulness to the company. Only after such a review has been conducted should payments be authorised. After payment is made, all orders of goods/services should be reviewed to ensure that the orders were actually fulfilled.

#3. If you sell products, use a proper inventory management system

Make sure you use an inventory management system to keep track of all the products you hold in stock, and all the products you’ve sold. Not only will this help in doing data analysis on what kinds of products your customers like, it will also help to prevent employee theft of your inventory. An inventory management system will help to keep track of every item that comes in from your suppliers (or that you’ve produced), and every item that leaves your store/warehouse.

An inventory management system will help you to reconcile all sales receipts with products sold. Make sure that the correct amounts were charged to customers for the products in question. If you see refunds being processed, make sure those refunds were legitimate. In 2018, a cashier at Takashimaya was found to have stolen from her employer by issuing false refund claims. The cashier then pocketed the money disbursed from these fraudulent refunds. The fraud went unnoticed for years because the employer did not conduct stock checks to see if the refunded products were actually returned! Inventory management software, coupled with basic inventory management practices, will go a long way to preventing employees from committing fraud against you.

#4. Perform both regular and surprise audits

You should perform an annual financial audit of all your company’s transactions. Hire an accountant to go through all your bills, purchases, inflows, and outflows – essentially every movement of money that’s ever occurred in the year. This will help bring to light any fraudulent transactions that may have occurred.

However, don’t just rely on the one yearly audit to make sure that your employees are behaving appropriately. It’s advisable for business owners to spring surprise audits through the year. This is especially important as your company grows and you hire more staff. If your employees know that you could spring a surprise audit on any given day, they’ll be much more cautious about doing anything suspicious. If you need to prove employee theft, here’s a handy guide. Surprise audits can act as a very useful deterrent to would-be thieves and fraudsters. Plus, they’re relatively easy to perform, and don’t cost much.

#5. Have fidelity guarantee insurance (AKA employee theft insurance)

No matter how many of the above precautions you might take, it’s still completely possible for employees to steal from your business. After all, you can’t monitor every last action of all your employees. For your staff to be productive and efficient, there has to be a certain level of implicit trust between employer and employee.

Of course, it is precisely this trust that unscrupulous employees will take advantage of. So what can business owners do, above and beyond the above security protocols? The answer lies in a fantastic business insurance policy called Fidelity Guarantee Insurance. A fidelity guarantee policy will pay for theft or fraud committed by employees.

For instance, if your employees steal cash from your register, fidelity guarantee insurance will pay the amount that was stolen from you. If your employee embezzles funds from your company by submitting fake purchase invoices, fidelity guarantee insurance will pay for the stolen funds.

Provide is the best place to get online fidelity guarantee insurance quotes. Save up to 25% on your premiums. Our online platform has lower overheads, so we pass every dollar saved back to you.


Proving Employee Theft in Singapore: 3 Simple Steps

proving employee theft singapore

Proving Employee Theft in Singapore: 3 Simple Steps for Business Owners

proving employee theft singapore

If you suspect your employee has stolen from you, don’t lash out at them or make decisions in a panic. Before you accuse your employee of doing anything, make sure you read this guide to ensure you know the proper steps to proving employee theft.

Step 1: Initiate an internal inquiry

There is no legally mandated procedure for an inquiry. In general, you should do the following:

  1. Calmly inform the employee of their alleged theft/misconduct
  2. Allow the employee to present their arguments
  3. The person overseeing the inquiry should not have clear reasons to be suspected of bias against the accused employee.

Businesses can suspend an employee from work during an inquiry. This is legally permissible under Singapore’s Employment Act. There are 3 important conditions to such suspensions:

  1. You cannot suspend your employee for more than 1 week without permission from the Commissioner of Labour.
  2. You must pay your employee at least 50% of their salary during their suspension.
  3. If you wish to extend the suspension period beyond 1 week, you must seek permission from the Commissioner of Labour.

Step 2: Gather evidence to prove your case

What fraudulent acts have you suspected your employee of committing? Is it stealing cash from the register? Is it billing fake expenses to company accounts? Identify the specific source(s) of fraud/theft and then set about gathering evidence to see if the employee really did commit those acts.

Here are some helpful tips to gathering evidence to prove employee theft:

  1. Review CCTV footage: If you suspect your employee has stolen cash (e.g. from a cash register) or inventory, review your CCTV footage to see if you can find evidence of your employee pocketing the money or goods.
  2. Audit your accounts thoroughly: Engage a professional auditor to thoroughly check through your books, to see if accounts have been falsified or maliciously inflated.
  3. Review expense bills: If the employee has submitted expenses to be billed to the company, check through the receipts that they filed claims for. Call the businesses up to verify the purchases. Were they actual purchases or fake bills/receipts?
  4. Review invoices: If the employee has submitted purchase orders, check through the invoices to see if they were legitimate purchases. They could be goods sold to a fake company, or payments made to fake entities.

Step 3: Conclude results from inquiry

After the inquiry, you must arrive at a conclusion as to whether or not the employee indeed stole from your business.

Misconduct found: If your inquiry finds that misconduct was indeed committed, businesses have several options:

  1. Immediately downgrade the employee.
  2. Immediately suspend the employee from work without pay, for a maximum of one week.
  3. Fire the employee without notice, with no salary in lieu of notice to be paid.

No misconduct found: If your inquiry finds that no misconduct was committed (or you cannot prove this), then you must restore the full amount of the salary that was withheld during the suspension period. For instance, if you only paid your employee the minimum 50% of salary during the 1-week suspension, you must return them the remaining 50%.

How to protect your business from employee theft?

We wrote a guide on how business owners can prevent employee theft (or at least minimise the risk). Although you can take many precautions against employee theft, fraud or theft that’s committed by your own workers is an ever-present risk that’s never going to go away. This is a harsh reality that remains true no matter how many precautions you take.

That’s why it’s important to insure yourself against the financial losses you may suffer in the event of employees stealing from you. At Provide, we offer fidelity guarantee insurance, which protects you from employee theft. Fidelity guarantee insurance pays for any cash stolen by your staff, or fraud committed by employees. Save up to 25% on your premiums when you use Provide for business insurance.

Charity Public Liability Insurance Guide: Top 3 Things To Know Before Buying

charity public liability insurance

Charity Public Liability Insurance Guide: Top 3 Things To Know Before Buying

If you’re running a charity, you probably already know that it come with significant legal responsibilities. One of the biggest risks for charities is the risk of causing injury to other people, or property damage, while performing their charitable duties. For instance, charities that cook and deliver meals to the elderly can be held legally liable if one of their food recipients gets food poisoning. This can result in serious legal complications for the charity, particularly if the client falls seriously ill.

Charity public liability insurance is thus a straightforward and affordable way for charities to mitigate these wide-ranging and potentially severe risks. Having a good public liability insurance policy allows charities to perform their duties, without restricting their activities because of a fear of legal liability. In this guide, we’ll walk you through the top 3 things you need to know before you buy charity public liability insurance.

#1. What is charity public liability insurance?

Public liability insurance for charities essentially protects your organisation against legal liability caused by their charitable activities.

Charity public liability insurance covers two main legal liabilities:

  1. Causing injuries to other people
  2. Causing property damage

Depending on the exact activities your charity performs, your charity could have greater exposure to one of these two risks (or potentially even both). For instance, if you help to conduct home repairs for low-income families, you run the risk of accidentally damaging their property while performing such repairs or renovations. Your charity can be held liable to pay for these damages.

Charity public liability insurance will pay for the following costs:

  1. Lawyer’s fees
  2. Damages awarded by the courts

#2. Why is charity public liability insurance important?

If you get sued for causing injuries or property damage, the cost to your charity is going to be extremely significant. Lawsuits will easily cost hundreds of thousands of dollars, with cases commonly taking years to defend and conclude. The cruelest irony is this: even if you are actually not at fault and end up winning the lawsuit, simply financing a legal defense alone will cost an exorbitant amount of money.

Example 1: Food delivery charity

Let’s say you run a charity that cooks and delivers meals to underprivileged households. If your food causes food poisoning to the people receiving your food, you might very well get sued for causing personal injury. If you don’t have a public liability insurance policy, every dollar of your legal fees and damages awarded will have to come out of your pocket.

Example 2: Home nursing charity

Let’s say you run a charity that provides nursing care to the elderly and terminally ill. Your charity runs a serious risk of causing injuries (or even death) to the people you’re responsible to care for.

#3. How much does charity public liability insurance cost?

Charity activities (example) Cover amount (example) Typical premium
Food preparation and delivery $500,000 From $250/year
Childcare $500,000 From $300/year
Elderly care $500,000 From $300/year
Education $500,000 From $200/year
Medical care $500,000 From $250/year

The above table shows some examples of how much charity public liability insurance might cost you. The examples of charitable activities, and the coverage amounts, are just examples – they are not meant to be exhaustive. Charity public liability insurance premiums can vary significantly based on the nature of the charity in question.

Charities that operate strictly from an office, with limited manual/hands-on medical work done for their clients will experience lower premiums. This might be the case for, say, a charity that simply provides financial assistance to underprivileged households.

Charities that perform more hands-on work for their clients will experience higher premiums. Charities that deliver food to clients have food poisoning liability. Charities that offer medical services have medical malpractice liability and personal injury liability.

Where is the best place to get charity public liability insurance?

Provide’s online platform is the best place to get public liability insurance for your charity. Save up to 25% on your insurance premiums. Because we operate on an online model, our overheads are lower, so we pass every dollars saved back to you.

Get an online quote for charity public liability insurance now.



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