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Good business practices and management

Updated December 23, 2009

The following business practices and good management will help prevent many of these problems.

Tighten your hiring practices

Require job applicants to fill out a detailed application form. Then use it to contact all references and former employers.

Maintain separate functions

The bookkeeper should never handle cash. The person who makes the purchases should not be the person who pays the bills. Your accounting system should enforce accountability through a series of checks and balances. Each function should serve as a check on all the transactions that went before. Have an independent company audit your books every year.

Set a good personal example

The boss who takes merchandise and office supplies without paying encourages employees to do the same.

Keep employee morale high

Employees who are treated fairly and generously are far less likely to "rip off" their boss. So get to know your employees better. Ask for their opinions or suggesions, and seriously consider them. Involve your employees in effective crime prevention practices. Consider starting a profit-sharing program. Make sure your salary rates are competitive; an underpaid employee may feel that stealing from you merely "makes up the difference."

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