Carol owned a thriving company. Her best friend was a bookkeeper and needed a job, so Carol hired her. The arrangement seemingly worked well for 15 years. The two friends remained as close as ever, with their families sharing children’s events and major holidays. Carol trusted her friend completely and gave her unrestricted access to the company’s finances.

But Carol’s friend had secretly developed an online gambling addiction. She couldn’t pay her debts with family funds or her husband would find out, so she had been funneling money from her employer’s company. It was done in increments small enough to pass under the radar but since there was no system in place to audit her work, this went undetected for years and amounted to many thousands of dollars. The bookkeeper eventually got careless and was caught but it was too late.

It would be wonderful if this story had been an isolated case, but we’ve consulted with many companies concerning problems resulting from internal theft. In fact, probably at least half our clients over the years have experienced some form of employee theft. Here are some other examples we’ve seen:

A contractor’s employee used a company truck and tools to operate his own business during “off” hours. (He was caught when he started soliciting work from the contractor’s customers.)

A restaurant employee was giving free food to all her friends, while another employee came up with a way to steal some of the money when a customer paid with cash.

A manufacturer’s purchasing agent routinely ordered extra tools for his home when ordering for the company.

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Several employees who were issued gasoline credit cards used them to fill their personal vehicles.

Employees took expensive materials from job sites and resold them.

Employees were caught stealing the company’s valuable scrap materials.

How costly are these incidents? According to the Association of Certified Fraud Examiners’ 2010 Report to the Nations, the median loss caused by the occupational fraud cases they studied was $160,000. These frauds lasted 18 months on average before they were detected.

The report went on to say, “Small organizations are disproportionately victimized by occupational fraud. These organizations are typically lacking in anti-fraud controls compared to their larger counterparts, which makes them particularly vulnerable to fraud.” The median loss cited in the ACFE report may seem high, but we’ve talked to many business owners who have sustained losses of over $100,000.

Small companies may lack the ability to institute sophisticated anti-fraud systems but there are things you can do to protect your company. Here are three simple systems to implement:

“Checks and balances.” You need a system to preclude any one employee from having unlimited access to a major part of your business without adequate supervision or audit. All too often, it is easy for an employee to steal from the business because they have control over the entire process.

For example, the accountant is given authority to write checks and is also the person who balances the checkbook. Or a purchasing agent is also the person who checks the items when they are received. Or the person responsible for buying inventory also does all the counts at year-end. By splitting the responsibilities, many employee thefts can be avoided. Often, simply knowing they are watched can serve as a tremendous deterrent.

Employee Background Checks. The best way to keep an employee from stealing from you is to never make them an employee. A call lasting just a few minutes to a past employer could make the difference between being ripped off and never hiring the crook in the first place. While many companies have become very selective in what they will tell you about a past employee, it’s still common to find people who will share more information. A fairly inexpensive background check can also provide a lot of information about their past history.

Checklists. While checklists seem like a simple tool, they can be invaluable for monitoring inventory, supplies and tools, and how company vehicles are used. For example, every time a company truck containing tools or supplies leaves your premises, a checklist should be used to inventory what’s on the truck when it leaves and returns. This keeps the employee from claiming that items were never on the truck or that someone else is responsible. It may take a few minutes of extra time, but also shows the employee that the items are being watched closely.

It would be great if employees were always honest, but that’s not the real world. As a business owner, you can’t afford to risk the wellbeing of your company by simply trusting that no one will steal from you. By implementing systems and controls — and enforcing them — you’re protecting your business and the livelihood of everyone working there.

Laddie and Judy Blaskowski are partners in several businesses, including BusinessTruths Consulting. They are authors of The Step Dynamic: A Powerful Strategy for Successfully Growing Your Business.