How to Prevent Fraud in Your Tree Trimming Business

Most tree trimming companies are small businesses. That means you don’t have an army of lawyers at your beck and call, and you entrust many functions of your business to others, partners or employees. Most of the time, your trust is well placed. This blog is about those few times when it’s not.
Let’s take a look at the warning signs of embezzlement and what you can do to prevent it.
Shadow Companies
One of the common forms embezzlement takes in the tree-care business is to set up a shadow company. Sometimes a partner or employee will do this when he or she has ambitions to go into business. Unlike other forms of fraud, your untrustworthy partner or employee isn’t directly stealing company funds, but rather stealing company business.
The thief will work side jobs, redirect phone calls, and email messages into his or her own channels, and accumulate clients and work at your expense – often while pretending to be you.
Of course, embezzlement also happens the old fashioned way, in which funds are slipped out of your company bank account into some other place where your dishonest employee can access them.
The best way to deal with this sort of thing is to watch for the signs and stop it before it becomes a truly serious problem.
- Does your employee seem too diligent, working late and on weekends, never taking vacation?
- Do you sometimes get calls from clients about work that you didn’t do?
- Are you getting complaints from clients about calls or messages not returned or answered?
- Has a customer made any other complaint that makes no sense, referring to bills that don’t appear in your records or problems with work you never contracted to do? (The same goes for praise, although that’s not as likely to happen.)
- Is a partner or employee suddenly spending more money and living more lavishly than your business or his or her paycheck could realistically justify?
- Are there discrepancies in the books and missing money?
If you see any of this happening, investigate further, and terminate any employee who’s involved. Also, there are things you can do to help prevent embezzlement. This includes clear non-compete agreements that let all your employees know what kind of moonlighting is not acceptable, and thorough background checks for all employees. Surprise audits of company accounts can catch embezzlement of funds, and when you get strange communications from clients, follow up on them instead of just dismissing them.
Fraud isn’t a comfortable topic. You don’t want to think of your people as untrustworthy. But it’s always possible, and best to take precautions.