Running a business is anything but easy. Cash flow doesn’t always rise to preferable levels. Lean times put owners at significant risk. Upon discovering recent hard times may be due to an employee embezzling funds, the shock may prove overwhelming. Legal action then follows. Having someone arrested for embezzlement, however, doesn’t automatically chart a path for the future. A business owner must take concrete steps to recover fully from an embezzlement scandal.
Explore All Legal Avenues
Suing the responsible parties to recover your losses could mitigate some of the damage. Filing criminal charges makes sense as well. Even when there is nothing to gain from a lawsuit, the criminal charges can send a clear message. Any legal action you take shows you won’t tolerate illegal activities. Showing you will take action could discourage others from improper behavior.
Check with Your Insurance Providers
Is embezzlement covered under your business policy? A standard business insurance policy does not cover embezzlement. If the policy contains additional coverage for “employee theft,” then you could file a claim. Business owners who didn’t purchase this type of insurance won’t be able to recover on what they lost. However, purchasing this and other crime-related insurance could protect the business from future troubles.
Change the Hiring Practices
An embezzler may be the worst “bad apple” employee a business could sign. In the aftermath, an owner may wonder how the worker turned out to be a thief. Perhaps a pre-employment background check would have revealed serious red flags. If you are incapable of performing these duties, hire a service that can. Otherwise, the business runs the risk of suffering from future employee malfeasance.
Instill Confidence in Partners and Customers
The fallout from embezzlement scandals includes partners and customers becoming leery of continuing a business relationship. Concerns over the business’ long-term health can put off others from wanting to work with it. Addressing these concerns must become a top priority. Take definitive steps to prove to others that preventive measures are in place. Otherwise, they may run to competitors causing financial bleeding to continue.
Last, keep a careful eye on all financial accounts. Catching any future acts of embezzlement before they go too far could reduce the impact. And work hard to improve revenue. Ultimately, a business has to work hard at overcoming its losses. Doing so is the only real way to bounce back. New money has to replace the lost funds.