Skimming, if you don’t already know, is the removal of cash from a company at some stage before the transaction is recorded into their accounting system.
As the transaction is never recorded, it is an extremely difficult fraud to detect.
Those most likely to commit skimming fraud are employees who have direct contact with customers, and especially those who handle cash transactions.
Below are the three means of skimming, along with tips on how you may be able to detect them –
Short-term skimming is, in some ways, borrowing money rather than stealing it.
By delaying the receipt of payment, the employee is able to use the funds for short term investments generating interest or other funds to their benefit.
Ultimately, the money may be returned to the company, albeit at a later date.
However, the company may lose out on interest payment in the meantime and theft is still theft, however you look at it.
Short-term skimming may be identified by analysing customer habits – do some seem to suddenly be paying late?
Or, are cash tills showing losses on some day and gains on others?
The most common form of skimming involves simply not recording sales.
Even though there may be controls in place, such as audit rolls, managers, and CCTV, dishonest employees may still be able to pocket cash from unrecorded sales whilst evading detection.
Such skimming can be extremely hard to detect.
One method is to pre-number audit rolls in some way.
This will highlight cases where the employee is manipulating their till such as to not record sales.
Otherwise, a more visible management or security presence in the area may be the only other option.
Many employers offer their staff discounts as part of their benefits package.
In order to obtain this discount they may need to swipe or present a card at the time of purchase.
Some dishonest employees may take advantage of this by discounting customer’s bills without their knowledge and then pocketing the difference between the full and discounted values.
The best means of detecting this type of fraud is through surveillance if available, or strong controls of the staff discount procedure, i.e., audits which would reveal high or strange usage patterns.
Irrespective of how an employee may attempt to commit fraud by skimming, the simplest means of prevention and detection is via the use of strong and clearly communicated internal control methods.
Clearly defined roles and a loss prevention strategy can remove temptation and aid in rapid detection, thereby minimising risk to this type of fraud.