10 ways to abuse employees of their official position and methods of dealing with them using the accounting system

Not so long ago on one of the projects during the inventory a very big shortage was revealed. As a result, one of the most important requirements of the client for the project was: to deal with what was happening in the system and bring the remnants, as he put it, “in an adequate state”.

And shortly before that, I had a case in practice when, on the second day after the introduction of a high-quality cash flow accounting system (cash desk), there was also a shortage, but already at the cash desk.

Both in the first and in the second case, the customer representatives tried to put the blame for the problem on the people who were involved in the implementation of the new system. And only after long and, I must admit, rather unpleasant and very emotional trials, we managed to prove to the client that the system was working correctly, and the company's employees, who deliberately or unintentionally created an actual shortage of goods and money, were to blame for the incident.
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Such situations in my practice are far from isolated. In the small and medium business with which I work, the difficulties with accounting and abuse associated with the lack of a complete accounting system are a very common problem. That is why I have to explain to customers one and the same things that are commonplace for me, but, as it turned out, not for customers.

This article aims to systematize my experience in identifying abuses, and reveal typical cases that I come across very often. I hope that it will help the management and business owners to avoid mistakes and unpleasant situations. And, of course, I really hope that after writing this article I will have much less often to explain the basic concepts and typical patterns of abuse to my future clients.

Important: In this article, I write about the methods used by unscrupulous employees. I understand perfectly that most of the employees in any company are honest and decent people who will never allow themselves to misbehave and deceive the employer. But, as they say, the family has a black sheep, and I want to talk about such situations. Moreover, they are found, sadly, much more often than we all would like.

Below I will list the 10 most common methods of abuse of office status by employees, as well as methods of dealing with them. But first you need to figure out: why is such a situation possible at all?

Causes of abuse: how is this possible?

The fact is that representatives of modern small and medium business (and often large) are very poorly versed in accounting systems. The reason for this lies in the fact that in our country business grew during the “fat years” very quickly, and managers started working with the simplest systems, and by the time a more or less serious accounting system was needed, they already had hired staff.

As a result, participation in the implementation and regular work with the accounting system are conducted by employees, and the manager does not find time to personally delve into all the nuances, and he almost does not work with the new system either. As a result, the company's management is very poorly versed in the accounting system that is used in their own company. It is clear that employees with certain knowledge, see the opportunity to take advantage of this ignorance in their favor.

In past “obese” years, most of these abuses went unnoticed, since it could simply not be noticed against the background of high profits. But in recent years, in the conditions of crisis and recession in the economy, owners and business leaders have begun to take into account even small amounts of losses and pay attention to them.

Why are such abuses at all possible? The main reason is the lack of the necessary knowledge of management, and the presence of a deep knowledge of the accounting system for employees who work with it. It is clear that a person in the process of working with any system gradually studies it, sees all the “ins and outs”, notices various “holes” and flaws. And there is a temptation to use this knowledge in their favor.

At the same time, very often employees of the company deliberately mislead the management about their level of knowledge of the system. They tried to deceive me like this when I acted as a visiting business consultant and was studying the current work of the company. In some cases, I even started teaching people in the system who actually knew it very well.

As I found out that me and the management of the company were misleading, the question is separate. Here I want to consider the reasons why people acted this way. And they boil down to various types of abuse that employees tried to hide with the help of apparent ignorance. Let's look at the most common ones.

1. The real provision of one service and the conduct of another

This abuse option is usually present in the service industry. For example, I observed such actions in a massage parlor, where the master provided a real service to a client worth 1000 rubles and received just such a sum in cash. And another service was added to the system, the cost of which was only 300 rubles. And a small amount was also sent to the company's cashier.

Such abuse almost always implies collusion with the administrator, i.e. with the person who conducts services in the system, and also monitors the work of the salon or sales department. In another case, such abuses are extremely risky, and therefore possible only in isolated cases.

How to deal with this:

1. Customer personalization and bonus points. If each of your clients is registered in the system, and after the service is provided, bonus points will be accrued to them, then the clients themselves who are interested in correctly calculating bonuses will become a protection factor against employee abuse.
2. Employee Motivation. Sophisticated payment and motivation also reduces the number of possible abuses.
3. Strict accounting of sales with personification by employees and competent reporting system. In this case, the manager will always be able to analyze what services each of the employees provides, what types of services are sold in each case. Such reporting clearly shows which employees work worse than others, sells more cheap services, etc. It also helps to notice drastic changes in the work of employees or inconsistencies of the sold services with the overall picture.

Understanding that management can analyze such indicators at any time, and that employees with low sales figures can be punished financially and even dismissed, also noticeably reduces the desire to engage in this type of abuse.

2. The service (sale) is not carried out through the system at all.

In this case, the client receives the product or service, pays for it in full, but does not receive the check, and the sale itself is not conducted at all through the accounting system. Buyers may or may not know about it, it depends on many factors.

In the case of the sale of an unrecorded service, the problem lies in the loss of profits, and in the sale of goods that have not been carried out at all, there are shortages in the warehouse, which subsequently also almost always “crush”. They are written off for re-grading or are hidden in the general document on the inventory among other goods, which for various reasons were also in the “shortage” column. And therefore, to identify such a sale later is almost impossible.

How to deal with this:

1. As in the previous case, the personification of clients and the bonus system work well. Interested buyers to ensure that their purchases are properly recorded, and they will control the sales process themselves.
2. Monitoring the work of employees. It is necessary to take into account in the system incoming, outgoing calls, correspondence with customers via the Internet, any customer requests.

For the implementation of these solutions, a well-tuned customer service system (CRM) is suitable, and for buyers, you need to create a separate service where they can see their purchases and bonuses accrued. For example, the SMS notification system works very well, when after each purchase a person receives a notification “Thank you for the purchase, you have a bonus in the amount of ...” or any other similar methods.

3. A manager sells a product (service) with one discount, and spends it with another.

Here it is very important to understand that your customers are interested in their profit, and not in your profit. In most cases, the return of the goods is not made, and therefore the buyers are not very much and need some kind of warranty documents and checks or other documentary proof of purchase. Especially often such a scheme works in small companies that are registered as individual entrepreneurs, and, accordingly, they do not need checks for accounting and tax reporting.

How does this happen? Customers are very easy to collude with the seller to get the goods at the best price. As a result, the manager carries out the goods "for themselves", i.e. with the greatest possible discount for employees. Or else somehow makes a sale at a discount, for example, it creates a card of a fictitious wholesale buyer, for which it issues the goods, while the real sale took place to several retail customers.

In this case, buyers receive from the manager some discount, for example, 5%, and pay for purchases in cash. And the manager draws up the goods with a 15-20% discount, conducts the flow of funds through the cashier, and takes the difference.
Another option is to sell goods without any discount at all, and making a purchase on a customer card, which has a good discount in the system. Of course, when reconciling with the client, these sales can be revealed, but if all the work with the client, including reconciliation of debts, is carried out by the same manager, who draws up a fictitious sale, then with such a scheme it remains unpunished.

How to deal with it?

Here only high-quality and constant control of the client base will help. If you identify an unfamiliar large customer who pays in cash, the head of the sales department should be interested in who the customer is and how you can contact him. Also, questions should arise if the manager draws a large amount of goods.

Any tricks of managers in such cases are revealed only with the help of strict sales control. High-quality work with a customer base is a method that will help both avoid fraud on the part of employees, and improve the quality of work with customers.

4. Frauds with currency rates

This method is very common in companies where prices are linked to the dollar, euro or any other foreign currency. Its essence lies in the fact that at the time of the transaction, the exchange rate was one, and this transaction is carried out according to another, more favorable rate for the buyer.
For example, a company sells goods for the price of 1 cu. What's next:

1. The customer buys, say, 20 units of such goods.
2. At the rate of 1 euro = 70 rubles the amount is 1,400 rubles. This is what the buyer pays for in cash.
3. The manager conducts the sale at the rate of 1 euro = 67 rubles.
4. As a result, the purchase price is 1340 rubles, and the difference (60 rubles) is in the seller’s pocket.
5. The course in the system changes back. But the invoice has already been carried out, the amount does not change in it.

Usually such frauds are practiced when selling large quantities of goods or at high prices in arbitrary units. In some cases collusion with the client is also quite possible, then the difference in price is divided between the manager and the buyer (the latter receives a discount in rubles, that is, selling at the rate is more profitable than is real on the day of purchase).

How to deal with it?

General recommendations - this is a competent distinction of access to the system. The employee with the rights of the seller should not have access to change the course in principle. Unfortunately, in small and medium businesses, very often they do not pay enough attention to the distinction between the rights of employees to access the system or the part-time seller also deals with other issues, including the timely change of exchange rates.

In the latter case, we have to look for non-trivial solutions. For example, one of my clients reazizovat such a scheme: with each change in the internal exchange rate in the system, he receives an e-mail notification. In his case, this method was the most effective.

5. Backdating

In this case, the seller creates the correct document, conducts the sale according to all the rules, and then marks the document for deletion. In this case, the seller receives the entire amount in cash, she is completely in his pocket, and in the system the sale is "not held."

In this case, the manager usually works in conjunction with the storekeeper, the amount from the sale is divided between them, and then the inventory hides the shortage in one way or another. In case of insufficient accounting at the warehouse, the storekeeper refers to the re-grader. And if this is not possible, the amount will be replenished upon the next purchase, i.e. the company ultimately receives the goods or, in the case of compensation for the shortage of the storekeeper’s salary, the cost of production, the storekeeper compensates for the damage from the amount of the invoice canceled. And the profit from the sale of these goods, which the company should have received, is instead divided between the manager and the storekeeper.

Also, they often backdate the amount of discounts or transfer the expense document from one date to another in order to get a sale at a favorable rate or product consumption at prices before revaluation (increase). Here, the manager usually works with the cashier, since the payment must also be changed, and the money can only be received in cash from the “plus” at the cash register, which is formed.

How to deal with it?

• The most effective method is a ban on backdating documents at the level of employee access rights.
• In cases where the ban on working with the documents held for one reason or another is not possible, you can also configure the supervisor to be notified about any editing or backdating.

Thus, each invoice canceled after the invoice must be justified. If managers know about it, and the manager is not lazy to delve into the reasons for changes in a particular document, the problem is also quite successfully solved.

6. Before inventory, goods are sold without documents or stolen, and the shortage is written off as confusion.

This usually happens before the first inventory in a company or when introducing a new accounting system. There were cases when people generally quit before the actual inventory, which revealed a significant shortage.

How to deal with it?

The only effective method is the installation of video surveillance. It is almost impossible to programmatically monitor such actions, since usually such thefts occur before inventory, which is carried out in order to restore order and create a modern accounting system.

The selective calculation of the real goods in the warehouse also has a certain effect. For example, you can select a group of products and count them 2-3 days before the inventory. Next, check the movement of these products in sales. If during the inventory the quantity did not coincide with the recalculated earlier (taking into account the sold items), then it was possible to identify the theft.

On the other hand, one can be sure that after the introduction of a high-quality system of accounting for goods and sales, such theft will be minimal or cease altogether. With each subsequent inventory, it will be possible to visually see if there is a re-grading. And for groups of goods, where the shortage is significant, you can always view a detailed movement (sales, cancellations, movements, etc.), identify the cause and take appropriate measures.

7. Payment of non-existent remuneration

This type of abuse is practiced in cases where the company practices this or that referral system. For example, in my practice there was an organization that trades building materials. And there was a system in which regular customers or partners in the referral program (designers, builders, repair teams, etc.) each time they bring a client, receive a certain percentage of remuneration from the transaction amount. Similar reward options for attracting customers are practiced in other areas.

What do sales managers do in this case? Part of the transactions that have no relation to the referral partners, they conduct as a transaction involving a referral. As a result, the amount of remuneration is formed, which the manager takes for himself or shares with the referral on whose behalf these transactions are conducted.

In some cases, which I observed in practice, the referral and the amount of payments reflected in the expenditure invoice as a comment. Usually, accounting systems do not record changes in the comments, and therefore it was very easy to change or delete such notes later. In other cases, fictitious “referrals” were added to the invoice at the time of sale, after which no changes were required.

How to deal with it?

Only a high-quality customer and sales accounting system can help here. It should be seen how this or that client appeared (calls and requests are recorded via the Internet), there should be the maximum possible personalization of customers, etc.

8. Editing cash documents backdating
In this case, the employee takes cash from the cash register, and then, in order to hide the shortage at the cash desk, he backdates some of the cash documents. For example, marks for deletion the receipt document, which was held 3-4 days ago. Or changes the amount in it to a smaller one. As a result, the remaining cash on hand coincides with the balances that the cash report shows to date.

Let's look at an example of how this works:

1. The balance on the cashier on the basis of the day should be 35 000 rubles. At the same time, in the morning the balance was 15,000 rubles, and the cash flow from the sale of goods amounted to 20,000 rubles.
2. From cash withdrawal cash in the amount of 10 000 rubles. It turns out a shortage. What does the cashier do?
3. From the cash documents received 2–3 days ago, the amount of 10,000 rubles is removed. This may be a mark on the deletion of the receipt document or a change in the amount (reduction) and a retrospect in the backdating.
4. Result: the rest of the morning is 10 000 rubles. Sales today, no one touched, they are fully consistent with reality - 20 000 rubles. Balance on hand - 25 000 rubles. The employee withdrew 10,000 rubles from the cash register for personal use, but he all agreed on the balance.
5. How to deal with it?

The prohibition of backdating of documents is also most effective here. Or, if this is not possible for some reason, setting up management notifications for any such adjustments.

9. Transfer of orders to the side

A very common abuse when a manager transfers orders to competitors for a fee. This is done either in plain text, i.e. The client is told that “we are not doing this, but there is such a company — that’s her contacts — they will help you.” Either the order is accepted, but all information, including the list of goods, prices, additional needs of the client, his contact information, is promptly transmitted to the competitor's sales department.

How to deal with it?

Here only the implementation of a CRM system will help, when all customer requests, all contacts, calls, etc. will be recorded. It is very important for each employee to know that any contact with the client at any stage, including, in the case of non-cooperation, can be verified by the manager. Monitoring the work of the sales department is no less important than monitoring the accounting of goods or cash.

10. Purchase of goods from the supplier at an inflated cost.

Everyone knows about this method of abuse. And the word "rollback" also sounded more than once in any company. In the event of this abuse, the employee responsible for the purchase of goods agrees to buy one or another assortment from the supplier at an inflated price, and the difference between the real cost and the inflated supplier pays him in cash.

Sellers often agree to frauds with “kickbacks”, since such a scheme ensures that the buyer will work with them for a long time and make purchases in large volumes. And it will remain loyal to the supplier even if competitors with interesting offers for the company-buyer appear on the market. The benefit of the employee or group of employees responsible for procurement is obvious.

How to deal with it?

This will help download suppliers' prices, placing orders for suppliers through the accounting system and controlling the price difference between the price list and incoming invoices when purchasing goods. In addition to software, sampling methods will also help.

For example, a request for a price can be made by the head of a company, simply as an anonymous potential customer. After that, the numbers also need to be compared with those listed in the prices entered into the accounting system. It is especially important to check those commodity items, the price of which for a standard markup for some reason turns out to be higher than that of competitors. It is also worthwhile to selectively monitor the prices of other potential suppliers of a group of goods selected for control.

Let's summarize: why did these troubles become possible?

In fact, almost all abuses of employees become possible simply because the company, for one reason or another, does not have a strict work automation system, there is no strict control, but there are certain violations. The most common situations that contribute to employee abuse:

• Insufficient cash discipline. Many companies are trying to save on taxes, and accept payment on bank cards of individuals (company management, employees), cash without a cash receipt, etc. All these payments are potential opportunities for employee scams, since they are not related to the client bank or cash register, such sales are carried out with a minimum of documents, and such payment options are always entered manually into the system. Then these documents in the system are often corrected, either due to abuse, or simply because of errors related to human factors.
• "Gray import". This is a situation when a company officially sells one brand, and customers are offered a choice: the original or “almost the same, but cheaper, even with the same bar code, but made in the Moscow region”. As a result of such not entirely correct sales, employees also receive a “field for activity”, since the product has a different price, and it is almost impossible to distinguish between it. Fortunately, I personally did not encounter such situations, but I heard about such methods of work that are not single-minded and I understand that abuses cannot be avoided here.
• Excessive trust of business owners to hired employees. At the same time, very often these same people pay a very small salary to hired staff. It is necessary to understand that each of the employees, even if he has been working for a long time and brings many benefits to the company, is primarily interested in his own welfare, and is only then ready to work for your business. Therefore, increased trust is an unnecessary temptation.

See how tough the cash discipline cashiers in banks. This whole set of rules and a strictly regulated list of actions are needed just so that people who work with money do not have the slightest opportunity to abuse their official position.

It is also important to understand that with low wages, the temptation to improve your financial situation is always higher than in the case of decent earnings. This is especially noticeable in companies where the amount of transactions that the manager concludes amounts to millions of rubles, and his salary is 30,000 rubles + small interest. In this case, the total amount on hand is, for example, about 45,000 rubles.

I have seen such a situation more than once, and I understand that with this approach, especially if the employee also sees the purchase prices and can calculate the profit from the transaction, the thoughts that he is underpaid will necessarily appear. And then it only depends on the person what he will do - whether he will quit or will, with the help of various abuses, “correct injustice”. I think the methods of dealing with such a situation are obvious: pay normal money and be sure to control the work of employees.

In addition, it is important to understand: abuses are possible not only when paying in cash, but also in those companies that operate only by bank transfer. If necessary, the manager can enter into an agreement with one of the clients, and get an analogue of the “rollback”, but already from the buyer. And if the amount is worth it, any employee can in the shortest possible time create a fictitious company or individual entrepreneur, as well as carry out cashless payments through third parties by agreement. It all depends on the benefits: if the final figure is worth it, no difficulties for your employees will stop. Therefore, accounting and control are also important for companies that work only by bank transfer, as well as for all others.

I hope that this article will help you avoid losses from employee abuse, as well as optimize the performance of your company. At the same time, it is very important to create a well-thought-out system of control and accounting of goods, sales, and cash flow, in which the manager can access any information using convenient reports. And employees will know that they can be checked quickly and unexpectedly. Lack of seduction is the best guarantee of honesty!