Fraud and Embezzlement

Many contractors have problems with fraud and embezzlement. This includes employees stealing materials off jobs, job supervisors inflating material orders on jobs and taking the excess home, job supers approving an inflated invoice and splitting the overage with subcontractors, or just plain embezzlement by those working in the bookkeeping end of the business.

It is a growing problem and you need to make sure you take precautions to ensure that it doesn’t happen to you. Start by you (the owner) or another trusted employee of the company (not one working on the jobs) checking the invoices at least once a week. Weekly checks make it easier to spot any job site theft or relocation of materials. Make cash handling and record keeping separate job functions. Do not let any single employee handle a transaction from start to finish.

If employee theft or fraud happens to you and you can prove your claim, then go after the culprit. Letting people off for criminal behavior is not the answer. They should be held accountable just as you are for the jobs that you do.

You have to protect your business at all costs. Hire good people and earn their loyalty by paying them well, treating them fairly, and running your business so everyone has a job and a future that they can rely on.

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