3 Operational Leakages Your Employees May Not Disclose to You

3 Operational Leakages Your Employees May Not Disclose to You

When reports on low sales figure and rising expense tickets become the only report that gets to your table daily, it’s time to keep aside the boss-subordinate relationship and start asking questions.

Though you’re running a small business, there will be inventory to manage, repairs to make, customer requests and complaints to attend to, payments to be made to suppliers, defaulting customers to catch up with and many more operational issues to deal with. When things get out of the ordinary, someone is not telling you what you should know.

As a small business owner with a simple organisation structure, you’ll probably be drawn to virtually all daily operational activities in your company. There’ll be a close interaction between you and your employees. You’re sure to know all your customers at least by their company’s name.

When your staff on a daily walks into your office and greets you with a superficial smile, submits her routine report without saying anything afterwards. You’re beginning to run alone. It’s time to put on your detective glasses and start investigating.

Prolonged Inventory Lapses

I’ll choose to start here because this is where your capital is converted to physical goods. An honest mistake by your staff could be tolerated if it happens once in a while. But repeated wastage or connivance by a group of employees can result to operational losses and therefore should not be tolerated.

Ensure your products in the office space and the warehouse are routinely checked by an inventory officer and crosschecked by you. If you’re a service oriented business and as such render professional services, you may not worry about this so much.

However stationery, computer & office equipment, pool cars, generators are still part of your assets. If you’ve not numerically tagged them, you can get someone do that and then document to review periodically.

A study revealed that dishonest employees account to about 28% of inventory losses while employee theft results to 43% of losses in revenue, from stationery to computer hard wares. As a small business, it’s important to keep your eyes on this.

Unexplained Cash flow Gaps

Worried about sales figures not matching up with your expected inflow month-in, month-out? This may not be the case for you exactly. But it’s important you understand how this works even if you have an accountant to do this for you.

When this occurs, don’t go about ranting as you could make your staff defensive and try to cover up more.

Be diplomatic in your approach, ask questions on revenue made and reconcile with bank statement.

Review expenses incurred against vouchers, request to be ‘copied’ on bank account debit and credit SMS alert if you’ve not done so. The scenarios are endless, ask questions on accounting entries and other items as the case may be.

If malpractices are uncovered, be sure to deal with it. In all, ensure you supervise the finances of your small business while you give your employees the freedom to blossom and be themselves.


There’s still no fast rule to this as this act is more personal to your staff. Some companies have other job declaration policies. Some bosses may tolerate this while others may not.

Moonlighting is simply — an employee working two jobs. Yours, the primary and another on the side. Most employees prefer to keep this to themselves. Well you shouldn’t start snooping around putting fingers into noses at the slightest suspicion.

If your business requires their absolute focus and concentration while at work, then you can come up with disclosure policies. This is not to victimize but to know your employees other commitments and see how you all could work it out if possible.

The downside is, once the secondary job starts becoming beneficial to the employee than yours, then you’re beginning to put the position the employee occupies at risk. So create an atmosphere for openness as much as possible and support the best way you can.

You could be lucky that the skills and contacts your employee develops on the side could become an asset to your business sometime in the future. Nevertheless prepare for the worst if he walks out the door tomorrow.

Originally published at www.aspirebyforce.com on August 22, 2016.