Recent events within the industry have highlighted the significant impact that employee fraud can have on a business. In one case, an employee allegedly used company quoting templates to create unauthorised quotes, completed work under the business's name, and diverted payments for personal gain. After leaving that employer, similar conduct was reportedly identified at another business.

While every business hopes to recruit trustworthy employees, fraud can occur in organisations of any size. The good news is that there are practical measures business owners can implement to reduce the risk of fraud and improve detection if it occurs.

1. Conduct Thorough Pre-Employment Screening

The first line of defence is careful recruitment.

Before engaging a new employee, businesses should consider

• Conducting reference checks with previous employers
• Verifying employment history and qualifications
• Reviewing any licences, certifications or registrations relevant to the role
• Asking behavioural questions during interviews to assess integrity and professionalism

 Careful recruitment processes can help identify potential concerns before an individual is given access to customers, financial systems or company resources.

2. Implement Controls Around Quotes and Invoices

Businesses should minimise opportunities for one individual to control an entire transaction from start to finish.

Consider:

• Requiring all quotes and invoices to be generated through an approved accounting, finance or CRM system.
• Ensuring quotes and invoices carry a unique, automatically generated sequence number.
• Requiring managerial approval for quotes above a specified value.
• Restricting employees' ability to issue invoices or process payments without oversight.

Where possible, no single employee should be able to create a quote, perform the work, issue an invoice and receive payment without independent review.

3. Maintain Strong Stock and Inventory Controls

Missing stock is often an early indicator of fraud or unauthorised work.

Businesses should

• Implement stock sign-out procedures.
• Require employees to record materials taken for each job.
• Conduct regular stock takes.
• Investigate discrepancies promptly

Maintaining accurate stock records can help identify unusual activity before losses escalate.

4. Use Job Scheduling and Tracking Systems

Modern job management software can provide valuable visibility over employee activities.

Businesses should consider systems that:

• Allocate work orders to employees
• Record time spent on jobs
• Track customer details and completed tasks
• Maintain an audit trail of who performed work and when

A clear record of employee activity can make it easier to identify unauthorised work or inconsistencies.

5. Consider GPS Tracking for Company Vehicles

GPS tracking can be an effective tool for protecting business assets and monitoring field operations.

Businesses may wish to consider GPS tracking systems that:

• Verify attendance at job sites
• Monitor company vehicle usage
• Identify potential unauthorised work activities
• Provide route and fleet management information
• Assist with vehicle recovery in the event of theft

Before implementing GPS tracking, businesses should ensure they comply with any applicable workplace surveillance and privacy requirements and clearly communicate the arrangement to employees.

6. Separate Key Financial Functions

Fraud risks increase where a single employee has complete control over financial processes.

Where practicable, separate responsibility for:

• Preparing quotes
• Approving work
• Issuing invoices
• Receiving payments
• Reconciling account

Even in smaller businesses, periodic management reviews of transactions can provide an effective safeguard.

7. Develop Clear Policies and Reporting Procedures

Employees should understand what conduct is expected of them and how concerns can be raised.

Businesses should consider implementing:

• A fraud and dishonesty policy
• Clear procedures regarding company records, customer information and financial transactions
• Reporting channels for employees to raise concerns confidentially

A strong workplace culture of accountability can significantly reduce fraud risk.

8. Regularly Review Business Records

Business owners should periodically review:

• Customer lists and job records
• Quotes that did not proceed to invoices
• Unusual payment arrangements
• Refunds, credits and write-offs
• Employee access permissions to software systems

Early detection is often the most effective way to minimise losses.

Key Takeaway

No control system can completely eliminate the risk of fraud. However, businesses that implement effective recruitment practices, maintain strong financial controls, and regularly monitor their operations are far better positioned to prevent, detect and respond to fraudulent conduct.

WSAA members should review their existing systems and consider whether additional safeguards may be appropriate for their business operations.

Explore These HR Resources

WSAA members have free access to arrange of practical HR resources through the Portal of Knowledge, including recruitment, screening and reference-checking tools that can assist in reducing the risk of workplace fraud and misconduct.

Access to these resources requires you to be logged into the Portal of Knowledge. Click here to log in.

Relevant Resources

• Recruitment & Selection Process – Checklist 
• Reference Checking Template (Online Generator) 
• Reference Check – Phone Template 
• Recruitment Candidate Selection Matrix

Not Registered Yet?

WSAA members can access the Portal of Knowledge at no additional cost. Click here to register and start exploring the resources available to support and protect yourbusiness.

Need support with HR,workplace relations or legal matters?

WSAA members can access support through Business Solutions Hub for assistance with HR, workplace relations (WR)and legal matters. Whether you have a question, need guidance or are navigating a more complex issue, the team is here to help.

Get in touch with Business Solutions Hub:

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