This series focuses on proven techniques to stop employee theft and fraud at your auto dealership.
Have a plan in place that limits employee access to sensitive areas. Look for weaknesses such as back office security- who has access, are there protocols for where people should or shouldn’t be? Use key cards, pass cards or fobs to keep people out of areas where they should not visit. Also, if your dealership uses traditional locks on doors, they should be changed annually.
Enable your employees to be the first line of defense. Employees should be comfortable in reporting something out of the ordinary, such as a sales person visiting the tire storage area. Install video cameras as a deterrent, and use monitor activities in sensitive areas. Make sure that employees are informed about the surveillance.
This is a defensive process that closes small holes where employees could take advantage of vulnerabilities in your dealership’s financial systems.
On an annual basis, your dealership should assess procedures and securities around purchasing, payroll, accounts payable, petty cash, expense account, receiving (parts department), intake and outtake, and inventory. Annual reviews by a third party auditor and/ or senior management can go miles toward strengthening vulnerabilities and also to adjust these systems to better suit the current size of your business.
System responsibilities should be assigned to more than one person. Cross-training is always a good thing, and rotating duties helps protect your systems from being taken advantage of.
There should never be one person who has full control of all aspects of the accounting department. Duties in vulnerable areas like this should be separated out among different positions to create opportunities for control and feedback in the processing system. Checks for over a certain amount should automatically require dual signatures, including one from the owner or general manager.