I stumbled on something in a Facebook business group and thought there were one or two lessons we could draw from it.
Mr. A works a regular 9-5 job and has a small drink store on the side, which he attends after work hours and on weekends. He has a salesperson who works full-time while joining in after work and on weekends. Mr. A noticed that from his sales records and inventory that the store records a lot more sales when he is around than on those days he is unable to make it to the drink store.
At first, he dismissed it to mean that people get more drinks in the evening after work and on weekends, but the situation gets worse such that he has to question having a salesperson at all. His inventory shows him that his salesman is not stealing his goods, of course, but something seems to be wrong somewhere. Why keep the store open from 9 am to 6 pm with only four sales, where you make almost a hundred sales from 6 pm to 10 pm? One weekend, Mr. A decides to install a CCTV device in the store without informing the salesperson. And over the next two weeks, he finally figured out what was going on.
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This may not qualify as outright theft, but the fact is, his employee was robbing him of his business profits. He pays the rent, utilities, and even the salary for the employee, without having enough income to justify the investment. And given that this employee stays in the drink store for almost 10 hours, you can imagine the magnitude of the loss for Mr. A.
A lady recounted how her salesgirls were inflating the price of frozen foods when she was not around and pocketing the difference. She only got to know because some of the customers complained about the price difference. In this case, they were not stealing from her. They were adding a little something for themselves, but this was injuring her business integrity.
Many small and medium businesses find themselves in the same ditch. Some may never even figure out what is going on. They may feel that business is not moving as smoothly as it should. This is not limited to companies selling products; even service providers find themselves in this cage. (I will talk more about that in a subsequent post).
Why are your payment and processes not wholly automated if you sell services or digital products? Why have you not installed a system where the goods can be scanned and documented and a receipt generated? You may not get an entirely foolproof method, but automating payments and procedures will reduce the incidence of fraud and theft and make it easier to do your inventory. We will talk more about the part of the services in a subsequent post.
Do you have a similar experience? Please share what cases of employee theft you have seen. How are you using automation to improve your business output? I will have my eyes on the comment section.