In today’s world, any organization is vulnerable to the various risks that cause direct or indirect financial damage.
Merchandise, products, business plans and information, production processes, raw materials and funds are all valuable company assets. Any damage to these assets harms the organization’s profitability and is liable to cause great financial damage.
Loss is assessed in terms of sales turnover percentage. The various assessments conducted by the organization’s accounting staff reflect the organization’s actual profitability vs. the profit forecast. The gap between the two stems – inter alia – from loss. The various statistical studies conducted every year throughout the Western world present clear data and trends pertaining to the different sectors – both in industry and in retail. The depreciation data (loss) ranges from 1% to 5% of the sales turnover – i.e. vast amounts of money.
The various risks are the result of theft, disposal of raw materials, product and merchandise theft, as well as loss due to flawed processes, errors, wasted resources and a lack of monitoring measures.
The various types of monetary losses can be attributed to the following main factors:
- Employee theft of money or merchandise
- Computer fraud and errors
- Violent and silent break-ins
- Human error
- Forgery and fraud committed by suppliers, customers and employees
- Sabotage or disposal of raw materials
- Management errors committed during work processes
Employee embezzlement, shoplifting and fraud are far from being isolated events. These incidents of theft cause cumulative monetary damage as well as monetary losses amounting to millions of shekels a year in both large and small businesses.
Retail, industry and logistics usually attract minimum wage earners. As such, the gap between the employee’s status and salary and his responsibility for handling merchandise, raw materials, products and money therefore creates a temptation to steal.
Not all employees are able to resist the temptation and some of them betray their employers’ trust. The stealing methods are many and varied, i.e. stealing merchandise by transferring it to acquaintances and relatives, smuggling products out of the store or factory by various means, stealing raw materials, collaborating with raw material and merchandise suppliers and even cash theft, credit card and check fraud, neglecting to write receipts and forging registries and reports.
For further information on how we can assist your business, please contact us and we will be glad to be of service.